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Ciena warns on 4Q, '02
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August 16, 2001: 10:01 a.m. ET
Network developer beats 3Q targets but stock plunges on lower guidance
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NEW YORK (CNNfn) - Fiber-optic network developer Ciena Corp. posted improved fiscal third-quarter profit and revenue Thursday, both of which edged Wall Street expectations, but the company's stock plunged after executives cut its growth targets.
Ciena earned $58 million, or 17 cents a share, in the quarter ended July 31, excluding special items. That's up from $28.8 million, or 10 cents a share, on the same basis a year earlier. Analysts surveyed by earnings tracker First Call forecast EPS of 16 cents.
Revenue at the company, which makes systems that increase the capacity of long-distance fiber-optic networks, nearly doubled to $458.1 million from $233.3 million a year earlier. First Call's forecast was for sales of $455.4 million.
Shares of Ciena (CIEN: down $8.78 to $19.34, Research, Estimates) lost more than a quarter of their volume in heavy trading Thursday after executives slashed earnings and profit guidance during an investors' conference call.
During the call, Chief Financial Officer Joseph Chinnici said 2001 earnings per share will be 59 cents to 64 cents. That indicates fourth-quarter EPS of only 3 to 8 cents rather than the 18-cent EPS First Call forecast and down from the 14 cents a share it earned a year earlier.
He also said 2002 EPS will be about flat with 2001. Analysts were expecting the company to earn 99 cents a share, according to First Call.
"We don't have good visibility for the remainder of 2001 or 2002," Chinnici said on the call.
CEO Gary Smith said 2001 revenue will grow 85 percent to 90 percent from 2000, off from the previous guidance for 95 percent to 105 percent growth. He added Ciena would see 2002 revenue growth in the "early teens," off from the previous forecast of 45 percent to 65 percent growth.
In the earnings statement Smith stressed that the company still sees growth, unlike many telecom equipment makers.
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"Though the overall telecom equipment market is likely to show continued slowdown over the next year, we believe that our portion of the market --
next-generation systems -- will continue to grow as carriers redirect capital expenditures toward solutions that lower costs and increase revenues," Smith said. 
-- from staff and wire reports
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Ciena
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