Ciena Earnings Drop, Shares Plunge
Dec. 13, 2001
LINTHICUM, Md. (AP) _ Optical networking equipment maker Ciena posted a fourth-quarter loss of $1.79 billion and predicted it would experience further losses because of uncertain market conditions. Shares plunged 15 percent on the news.
For the three months ended Oct. 31, Ciena lost $5.51 per share, compared with income of $25.8 million, or 9 cents per share, in the year ago period, the company said Thursday.
Excluding one-time charges _ including a $1.72 billion writedown of goodwill _ Ciena reported earnings of 5 cents a share, or $17.1 million, compared with 15 cents a share or $41.9 million during the fourth quarter of 2000.
The results met the reduced expectations of analysts surveyed by Thomson Financial/First Call.
Revenue rose 27 percent to $367.8 million from $287.6 million in the year ago period.
Investors responded by sending shares down $2.68 to $15.29 on the Nasdaq Stock Market.
Gary Smith, Ciena's president and chief executive officer, said the company planned to continue investing in its business, but ``given the uncertainty in the market and the resulting unpredictability of quarterly revenues, our sustained investment strategy means that we will incur operating losses.''
The $1.72 billion charge reflected a reconsideration of the value of its acquisition of Cyras Systems Inc. Ciena acquired the maker of network switches in December 2000 for $2.6 billion in stock.
``Considering the stock prices of companies in our industry, we had to consider the value of the asset lower than we originally considered it,'' Ciena spokesman Glenn Jasper said.
Ciena had previously warned that it would miss earnings and revenue forecasts for its fourth quarter and fiscal 2002, blaming a slowdown in spending by telecommunications carriers that use long-haul networks for its lowered projections.
For the full year, Ciena lost $1.79 billion, or $5.75 per share, on revenue of $1.60 billion. That compared with earnings of $81.4 million, or 29 cents per share, in fiscal 2000.