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

To: jach who wrote (3154)	9/16/1998 1:04:00 AM
From: Gary Korn	Read Replies (2) \| Respond to of 12623

9/21/98 Forbes 18A 1998 WL 12990029 Forbes Copyright 1998 Forbes Inc. Monday, September 21, 1998 Departments Follow-Through Follow Through BY Peter Newcomb Faulty connection LAST YEAR WE WROTE glowingly about how Ciena Corp. had beaten giant rivals like Lucent Technologies and France's Alcatel to market with gear that crams huge amounts of information down fiber-optic lines (Oct. 6, 1997). However, Ciena got a nasty surprise last month when AT&T said it would not order fiber-optic technology from the Linthicum, Md.-based firm that has been a pioneer in the new field of photonics. The report sent Ciena's market cap tumbling from $5.8 billion to $3.2 billion. Among other things, this knocked the price of Ciena's pending merger with network equipment maker Tellabs, Inc. down to $4.6 billion from $7.1 billion. The market, however, may have overreacted. BancAmerica Robertson Stephens analyst Paul Silverstein notes that Ciena still makes the biggest bandwidth-booster in actual use by carriers Sprint, Digital Teleport and Belgium's Hermes Europe Railtel. The Ciena system zooms 100 billion bits of information per second, enough for about 1.4 million simultaneous phone calls, down a single fiber. Similar equipment from Lucent won't be available until 1999. Bell Atlantic is testing a new Ciena system for local carriers. Silverstein expects Ciena's revenue to climb 52% this fiscal year, to $566 million, and 44% in 1999, to $817 million. Shrugs Ciena Chief Executive Patrick Nettles: "We'll supply AT&T's competitors." -TONI MACK