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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: Thai Nguyen who wrote (2674)	9/2/1998 11:01:00 PM
From: Bob Smith	Respond to of 12623

LISLE, Ill. & LINTHICUM, Md.--(BUSINESS WIRE)--Aug. 14, 1998-- CIENA Clarifies Certain Matters CIENA today announced that it expects revenue of approximately $129 million for its third fiscal quarter ended August 1, 1998. This compares with $121.8 million in revenue reported for the third fiscal quarter of 1997. Net income for the quarter is expected to be in the range of 13 cents to 15 cents per share, exclusive of one-time charges associated with CIENA's previously announced settlement with Pirelli. This compares with net income for the third fiscal quarter of 1997 of 34 cents per share. Patrick Nettles, president and chief executive officer of CIENA, said, "We regularly face the risk of revenue fluctuation. There was an unexpected late-quarter delay of receipt of an order of more than $25 million from an existing customer. Additionally, we believe the anticipated change to calendar quarter reporting resulted in some shifting of orders out of the fiscal third quarter." Nettles continued, "Turning to the bottom line, during the third quarter our gross margins were impacted by price concessions offered to a large customer in return for volume commitments. This reduced gross margins below our expected business model for the quarter." "It is too soon to predict the extent of the impact our continued market penetration efforts might have on results for the balance of the year," concluded Nettles. "The quarter's results are evidence that until we are able to more meaningfully diversify our customer base, CIENA's results for a given quarter could be significantly impacted by customer mix." "We knew going into this merger that CIENA's business does not come without risks and short-term volatility," said Tellabs President and CEO Michael J. Birck. "We continue to believe in the long-term, strategic value of this transaction. CIENA's optical products and expertise, coupled with Tellabs' array of existing and pending transport products and systems, comprise a formidable product base that far outweighs short-term revenue and earnings variations. And despite CIENA's fiscal third quarter shortfall, we believe that our earlier guidance regarding third and fourth quarter results for the combined company remains appropriate." The Boards of both companies, meeting separately this week, reaffirmed their unanimous recommendations in favor of the merger. Assuming the merger is approved on August 21, 1998, and closed shortly thereafter, the combined company expects to report results for the calendar third quarter in either the third or fourth week of October.