Ciena’s stock had fallen sharply by about 1 p.m. Eastern on Thursday after the Maryland-based telecom equipment maker reported $26.7 million in fourth-quarter losses. Ciena has purchased Nortel’s Metro Ethernet Networks unit in a move expected to double Ciena’s employee count and revenue numbers; but many observers are concerned about Ciena’s ability to smoothly and quickly absorb the Nortel assets. Not only is the Nortel name tarnished but the economic recovery is moving at a snail’s pace.
Investors’ jitters were clear in early afternoon trading – Ciena’s stocks had declined 10.2 percent to $11.88 by 12:44 p.m.
All in all, Ciena lost 29 cents a share, compared to 28 cents a year ago. Analysts had forecast a loss of 7 cents per share. Revenue fell from $179.7 million in 2008’s fourth quarter to $176.3 million.
But Ciena executives tried to remain upbeat. AT&T Inc. (T) is one of Ciena’s biggest customers and the carrier’s demand for equipment is increasing as it upgrades its network to host burgeoning data use. “Cautious” customer spending is likely to continue “as we enter 2010,” said Ciena CEO Gary Smith, yet the company expects to deliver “sequential revenue growth” in its fiscal first quarter. Analysts said that should amount to revenue of about $185 million.