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

To: bh who wrote (6508)	2/24/1999 5:30:00 PM
From: bh	Read Replies (1) \| Respond to of 12623

Ciena Shares Rally Amid Growing Optimism NEW YORK (Reuters) - Ciena Corp. (Nasdaq:CIEN - news) shares continued a four-day rally, rising nearly 16 percent Wednesday amid growing optimism that the telecommunications equipment maker's business has stabilized and its financial outlook is improving, analysts said. Ciena, the most actively-traded Nasdaq issue with more than 27 million shares changing hands, hit an intraday high of $29.25 -- its highest level in about six months -- but settled slightly to $27.25, up $2.625. The stock has gained about 37 percent over the past four trading sessions and about 90 percent so far this year. Ciena, which makes equipment that increases the capacity of fiber optic networks, had struggled over the past seven months since its proposed acquisition by rival Tellabs Inc. (Nasdaq:TLAB - news) fell apart and it lost its chance for a potential AT&T Corp. (NYSE:T - news) contract. Last week, Linthicum, Md.-based Ciena showed signs of improvement and posted better-than-expected first quarter earnings as it expanded its customer base. Ciena also offered a cautiously optimistic outlook for the second half of the year. Robertson Stephens analyst Paul Silverstein Wednesday upgraded Ciena's rating to buy from long-term attractive, citing improving gross margins, pricing stabilization and increased customer activity. Silverstein also said in a research report that demand for Ciena's products -- dense wave division multiplexing (DWDM) equipment used to increase capacity on fiber optic networks -- has increased over the past several months. While Ciena faces tough competition from larger rivals such as Lucent Technologies Inc. (NYSE:LU - news), Ciena is the only manufacturer that has rolled out a 40-channel version, analysts said. Ciena recently announced its first customer for a more powerful 96-channel version. Ciena recently won a victory over its competitors after its current customer Sprint Corp. (NYSE:FON - news) decided to continue using Ciena products through 1999 instead of seeking a second vendor. Sprint, the No. 3 U.S. long distance company, had been testing the products of other equipment makers, such as Lucent and Alcatel Alsthom, but decided to stay with Ciena for the rest of the year, Sprint spokesman Charles Fleckenstein said Wednesday. In addition to strengthening its relationship with existing customers, analysts expect Ciena to continue to expand its customer base. Silverstein said in his research report he was cautiously optimistic MCI WorldCom Inc. (Nasdaq:WCOM - news) may return as a significant customer. MCI WorldCom, the No. 2 U.S. long distance company, accounted for about $4 million or 4 percent of Ciena's revenues last quarter. A year ago, MCI WorldCom accounted for about 23 percent of Ciena's revenues, but the company scaled back its purchasing plans after it shifted to a just-in-time purchasing and deployment method. Analysts also expect Ciena's gross margins to improve. Last week, Ciena told analysts in a conference call it expected its gross margins to improve to the mid-40s range from the current level of 34 percent. Silverstein said Wednesday he expects Ciena's gross margins to improve to the 40-percent level by the fourth quarter of this year. Earlier Stories Ciena Shares Continue Rally On Growing Optimism (February 24) Ciena's Profits Plunge, But Beat Forecasts (February 19)

To: bh who wrote (6508)	2/24/1999 5:33:00 PM
From: bh	Read Replies (2) \| Respond to of 12623

Ciena up afterhour at 28 13/16. Wednesday February 24, 3:30 pm Eastern Time Sprint Says to Stay With Ciena in 1999 and Not Seek Another Vendor (This is a headline-only alert, although it will likely be followed by an article soon) biz.yahoo.com

To: bh who wrote (6508)	3/11/1999 1:51:00 AM
From: bh	Respond to of 12623

Barrons by: prettyr98 44709 of 44741 Ciena's Turnaround May Be Just Beginning By CAROLYN WHELAN For Ciena Corp., 1997 was the best year of its life. That was when the newly public company, which makes products that boost the capacity of telecommunications networks, saw its stock more than double in the first year Back then, Ciena, with a market capitalization of $2.6 billion, had the market cornered for dense wavelength division multiplexing (DWDM) equipment. Carriers trying to unclog bottlenecks or upgrade their networks for the Internet found the product attractive, because adding DWDM is cheaper than laying fiber optics cables. Last year Tellabs, another telecom equipment maker, offered to buy Ciena, driving its stock price up to an all-time high of 88 5/8. But Tellabs backed away from the $7.3-billion deal at the last minute amid news Ciena had lost a potential order from AT&T. Ciena's stock went into a freefall: The shares lost an astounding 90% of their value, to hit a low of 8 3/16 last October. Lately, however, Ciena has been on a comeback. Since October, the share price has almost tripled: It closed at 25 1/16 Wednesday. But Ciena stock remains more than 70 percent off its peak, and some on Wall Street think it has more room to run. "I do believe there is a turnaround," says Jim Kedersha, an analyst at SG Cowen Securities, which has a Strong Buy on the stock. "They execute extremely well, continue to be a leader, and there's a robust marketplace," adds Paul Silverstein, a senior analyst at BancBoston Robertson Stephens, which upgraded the stock to Buy from Long-Term Attractive on February 25. The icing on the cake? "In a consolidating industry, Ciena with its key technology is a potential acquiree," he says. And the stock does appear to be gaining more institutional support: Eight analysts rate Ciena a Buy today, up from six a month ago, according to Zacks Investment Research. In recent months, Ciena has inked some major deals with big foreign businesses, including a $200-million contract with Telemonde in the United Kingdom. Ciena's overseas business in the first fiscal quarter ending January was up more than 60% from the same quarter a year ago. International sales now account for 42% of revenues, more than double the 19.4% of total sales they comprised last year. And many consider the global DWDM market -- Ciena's strength -- to be largely untapped. "We see changes on the margin to visibility, customer concentration and gross margins," says Silverstein. "The company is clearly moving in the right direction." As a sign of the growing diversification in its customer base, Ciena ships products to 14 customers , twice last year's number. But, the real driver seems to be the fiber optics market. The explosive growth of the Internet has created a huge demand for bandwidth, and carriers are racing to widen their pipelines and provide high-speed access. (See Weekday Trader, "Excite Deal Shows Cable Modem is King," January 19.) "The market opportunity is huge. Spending in the near term [should] pick up," says Douglas MacKay, a portfolio manager who bought over a million shares of Ciena stock for the White Oak Growth Fund last October. Posted: Mar 10 1999 8:16PM EST as a reply to: Msg 44708 by tryonc Replies: View Replies to this Message Related Links Quote Profile Research Insider post.messages.yahoo.com@m2.yahoo.com

To: bh who wrote (6508)	3/11/1999 1:54:00 AM
From: bh	Read Replies (4) \| Respond to of 12623

Barrons - part 2 by: prettyr98 44710 of 44741 In 1998 alone, revenues in the DWDM market grew 70% to $1.7 billion, from $1 billion the previous year, according to San Jose, CA-based Dataquest, a unit of The Gartner Group. New products coming on stream from Ciena should help meet that demand. Its state-of-the-art 96-channel system, due out later this year, will be by far the largest commercially available system. Most competing products -- even from such technology heavyweights as Lucent Technologies and Northern Telecom -- have only 16 channels, and Ciena already dominates the market for 40-channel systems. (Ciena also works closely with Cisco Systems on another promising technology called Internet Protocol Over Glass.) Even bulls like Kedersha concede that recent good news -- including a series of positive earnings surprises -- is reflected to some degree in the stock price. But he expects the shares to move higher still as Ciena signs up new customers. At current prices, Ciena is trading at pretty high multiples -- nearly 100 times First Call's earnings estimate of 26 cents per share for the fiscal year ending October 1999 and at 38 times the fiscal 2000 estimate of 66 cents a share. But earnings are expected to grow by more than 150 percent next year. And Ciena's 32% projected long-term earnings growth rate is much higher than that of other fiber optics providers and four times that of the S&P 500, according to Zacks. BT Alex. Brown has a price target of 30 to 35 for Ciena stock over the next year to 18 months. Of course, the company still has some big challenges ahead -- diversifying its customer base and keeping ahead of the technological curve while fending off pricing battles with giants like Lucent and Nortel at the low end of the DWDM market. But the real billion-dollar question is whether Ciena ultimately can go it alone. The company did agree to be acquired by Tellabs before the deal fell through, and though management is mum about the issue now, chances are they would entertain a good offer. Meanwhile, over the last few weeks, several European telecommunications companies have snapped up smaller American firms for their data networking expertise and U.S. presence. On February 24, Alcatel announced its purchase of Xylan. And on Tuesday, Siemens confirmed its plans to buy two networking companies. The pros think Ericsson may be next in line to make a bid. "For any major European telco company that doesn't have a DWDM product, like Ericsson or Alcatel, [Ciena] would be a good platform," says Silverstein. And with many of the usual suspects already rounded up, Ciena would appear to be a logical choice -- for someone other than Tellabs, of course. Posted: Mar 10 1999 8:17PM EST as a reply to: Msg 44709 by prettyr98 Replies: View Replies to this Message post.messages.yahoo.com@m2.yahoo.com