Ciena Corporation (NASDAQ: CIEN) has come out with earnings and posted a 7% drop in non-GAAP EPS to $0.37 EPS on a 24% revenue rise to $253.2 million. First Call had estimates at $0.37 and $253.6M. Unfortunately the fiber optic and networking company is seeing a slowdown and order delay from its Tier One telecom and data carrier clients. It has now lowered revenue guidance to $190 to $210 million for its fiscal fourth quarter, which is a far cry from the $263 million expected by analysts in the First Call surveys.
The company said that while it has seen no project or ordercancellations, it is seeing sales cycles lengthening out farther andmany customer deployments are slowing. If you have followed JDSUniphase (NASDAQ: JDSU) and others in the telecom and data carriersectors this is no surprise in the thought of a business slowdown fromcustomers delaying orders or slowing down on their expansions. But theraw amount of the shortfall is far wider than any analysts wereconsidering. The absolute lowest estimate was still over $216 millionwith $263 million being expected.
Shares are halted after closing up 1% at $17.43 yesterday. these havealready been battered as the 52-week trading range is $16.34 to$49.55. Anyone hoping for any turn in trends in this sector is goingto have to wait a little longer.
Jon C. Ogg
September 4, 2008