Market Intelligence Center  May 5  Comment 
CIENA Corp (CIEN) traded between $21.30 and $22.14 before closing at $21.62 Monday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s algorithms have picked a Jan. '16 $22.00 covered call for a net debit of...
Benzinga  May 5  Comment 
The following are the M&A deals, rumors and chatter circulating on Wall Street for Monday May 4, 2015: Ciena to Acquire Cyan for $400M in Cash, Stock Deal The Deal: Ciena Corporation (NASDAQ: CIEN) announced Monday, it has entered into a...
TheStreet.com  May 4  Comment 
NEW YORK (TheStreet) -- Ciena shares are up 0.61% to $21.40 in trading on Monday after the company made a successful bid to acquire network solutions provider Cyan for approximately $400 million.The per share value of the deal is $4.75, a...
Wall Street Journal  May 4  Comment 
Benzinga  May 4  Comment 
Cyan Inc (NYSE: CYNI) shares gained 28.77 percent to touch a new 52-week high of $4.70 after the company agreed to be acquired by Ciena Corporation (NYSE: CIEN) for around $4.75 per share. Delphi Automotive PLC (NYSE: DLPH) shares reached a...
Telecom Ramblings  May 4  Comment 
Some five years after acquiring Nortel's MEN business, Ciena is making another significant acquisition of a competing vendor. This morning they announced a definitive agreement to acquire Cyan in a move that will take the company much deeper into...
Telecom Ramblings  Apr 29  Comment 
In today's roundup, an IX traffic milestone and three vendor wins to take a look at: DE-CIX says that traffic on its internet exchange in Frankfurt has surpassed a new milestone. On Tuesday evening they saw peak traffic hit 4Tbps for the first...
Telecom Ramblings  Apr 22  Comment 
Time for a quick look at other news from around the industry this week: some cloud help for first responders, two vendor deals, and a financial move in fiber. BlueLight and Bandwidth are working together to improve campus safety.  BlueLight is...
TheStreet.com  Apr 14  Comment 
NEW YORK (TheStreet) -- Shares of Ciena were gaining 6.4% to $21.19 on heavy trading volume on Tuesday after the communication equipment company's competitor Alcatel-Lucent  confirmed it is in talks with Nokia  about a possible...
Market Intelligence Center  Mar 27  Comment 
MarketIntelligenceCenter.com’s patented algorithms have chosen the Oct. '15 $20.00 call for a couple of hedged-trading ideas on CIENA Corp (CIEN). A traditional covered call on Ciena yields 12.55% (22.56% annualized, for comparison purposes...
Benzinga  Mar 25  Comment 
Ciena Corporation's (NYSE: CIEN) results will see a slight gain from its recently announced supply contract with Verizon Communications Inc. (NYSE: VZ), an analyst said Wednesday. JP Morgan's Rod Hall called the deal "incrementally positive" for...


Ciena Corporation's (NASDAQ:CIEN) proprietary Dense Wavelength Division Multiplexing optics technology, a communications network product that carries and aggregates data, can obtain speeds of up to 100 Gigabytes per second, a first, and the fastest current speed in the world.[1] The company specializes in transitioning legacy communications networks to converged, next generation architectures, capable of delivering a broader mix of high-bandwidth services.[2]

Governments worldwide, including the United States, have been researching and proposing plans for nationwide broadband access.[3] In addition, a large increase in internet traffic due to online video and file sharing has forced broadband carriers like AT&T to upgrade its network technology.[4] As Ciena's products achieve the fastest speeds currently available worldwide, it stands to benefit from network upgrades. Still, economic conditions, such as a decline in GDP has forced many carriers to scale back expansion.[5] [6]

Company Overview

Ciena Corporation is a provider of communications networking equipment, software and services that support the transport, switching, aggregation and management of voice, video, and data traffic. It is a network specialist targeting the transition of disparate, legacy communications networks to converged, next-generation architectures, able to handle traffic and deliver a mix of high-bandwidth communications services. The Company’s products, with their embedded, network element software and service and transport management, enable service providers to deliver critical enterprise and consumer-oriented communication services. In March 2010, CIENA Corporation acquired the optical networking and Carrier Ethernet assets of Nortel Networks Corporation's+ Metro Ethernet Networks (MEN) business.[7]

Business and Financial Metrics

Second Quarter 2010 Results (ended April 30, 2010)[8]

Revenue for the fiscal second quarter 2010 totaled $253.5 million. Fiscal second quarter results include $53.5 million in revenue from the acquired assets of Nortel’s Metro Ethernet Networks business, reflecting approximately six weeks of operations since the March 19, 2010 acquisition date. In accordance with acquisition accounting rules, Ciena did not recognize certain deferred revenue of the MEN business that would otherwise have been recognized by Nortel had the acquisition not occurred. Revenue from Ciena’s pre-acquisition portfolio was $200.0 million, representing a 14% sequential improvement compared to fiscal first quarter revenue of $175.9 million, and a 39% improvement compared to the same period a year ago when Ciena reported revenue of $144.2 million.

Ciena’s net loss for the fiscal second quarter 2010 was $(90.0) million, or $(0.97) per common share, which compares to a GAAP net loss of $(503.2) million, or $(5.53) per common share, for the second fiscal quarter of 2009, which included a non-cash charge of $455.7 million for impairment of goodwill. The fiscal second quarter 2010 included $39.2 million in acquisition and integration-related expenses associated with Ciena’s acquisition of the MEN business.

Business Segments

Optical Service Delivery

The Company’s optical service delivery portfolio includes transport and switching platforms that act as automated optical infrastructures for the delivery of a variety of enterprise and consumer-oriented network services. These products address both the core and metro segments of communications networks, as well as key managed service and enterprise applications. The Company’s core switching product is its CoreDirector Multiservice Optical Switch. CoreDirector is a multiservice, multi-protocol switching system that consolidates the functionality of an add/drop multiplexer, digital cross-connect and packet aggregator, into a single, high-capacity intelligent switching system. CoreDirector’s mesh capability creates networks. In addition to its application in core networks, CoreDirector is also focused to be used in metro networks for aggregation and forwarding of multiple services, including Ethernet/TDM Private Line, Triple Play and Internet protocol (IP) services.

During the fiscal year ended October 31, 2009 (fiscal 2009), the Company introduced its CoreDirector-FS, an expansion of its CoreDirector offering incorporating its FlexSelect technology elements. It also introduced its 5400 family of reconfigurable switching systems. In nationwide networks, the Company’s CoreDirector switching elements are connected by a long-haul transport infrastructure. Its principal core transport product is CoreStream Agility Optical Transport System. CoreStream Agility is a scalable wavelength division multiplexing (WDM) solution that enables transport of voice, video and data related to a variety of services for core networks, as well as regional and metro networks.

Carrier Ethernet Service Delivery

The Company’s carrier Ethernet service delivery offering primarily consists of service delivery switching products and service aggregation platforms. This offering also includes its legacy broadband access products for residential services. These products allow customers to utilize the automation and capacity created by its optical service delivery products in core and metro networks and to deliver new, revenue-generating services to consumers and enterprises. The Company’s carrier Ethernet service delivery products have applications from the edge of the metro/core network to the customer premises. Its principal products for consumer broadband are CNX-5 Broadband DSL System and CNX-5Plus Modular Broadband Loop Carrier.

Unified Software and Service Management Tools

The Company’s optical service delivery and carrier Ethernet service delivery products include a shared suite of embedded operating system software and network management software tools that serve to unify its product portfolio and provide the underlying automation and management features. ON-Center Network & Service Management Suite, the Company’s integrated network and service management software, is designed to simplify network management and operation across its portfolio. ON-Center can track individual services across multiple product suites, facilitating planned network maintenance, outage detection and identification of customers or services affected by network troubles.

Consulting and Support Services

The Company offers a range of consulting and support services that help customers design, deploy and operationalize their services. It provides these professional services through its internal services resources, as well as through service partners. Its services portfolio includes network analysis, planning and design; network optimization and tuning; project management, including staging, site preparation and installation activities; deployment services, including turnkey installation and turn-up and test services, and maintenance and support services, including helpdesk and technical assistance and training, spares and logistics management, software updates, engineering dispatch, advanced technical support, and hardware and software warranty extensions.

Trends and Forces

A Global Move to Establish Nationwide Broadband Connectivity

Called the "new global arms race" by Money Morning, governments worldwide have been establishing plans for nationwide broadband access.[9] In May 2009, Australia announced the most comprehensive plan to date; a $31 billion proposal that will bring broadband internet access to rural communities at taxpayer-subsidized rates and enhance the speed and intelligence of current networks. [10] Similarly, the United States' Congress has allocated $7.2 billion as part of its overall economic stimulus package to increase broadband penetration and coverage and to provide faster, more affordable service to as many Americans as possible. As part of the new legislation, the Federal Communications Commission has also been tasked with coming up with a national broadband policy. A move to smarter, faster networks nationwide will increase demand for high end fiber optics products, positioning Ciena as a top competitor for government contracts. [11]

Increased Data Traffic From A Surge in Online Media

The growth of online media -- from video sites like YouTube, file sharing platforms like BitTorrent, and online gaming -- has already led to massive increases in the amount of data traveling across the Internet. A study by the University of Minnesota found that worldwide internet traffic grew at annual rate of nearly 60% in 2008. [12] In 2009, the London Times noted that YouTube has become the second most popular internet search engine in the world after Google.[13] Online video requires high bandwidth speeds and capacity, and has already required that carriers spend massive amounts to upgrade networks, benefiting Ciena. Cisco, the market leader in optics and broadband technology forecasted internet growth between 2007 to 2012 could increase as much as 46% per year, with a very large portion of that growth coming from video demand.[14] Taking this into account, to keep up with customer demand, carriers will look to the best possible technologies. As Ciena has the fastest optics technology available, this gives it a comparative advantage over its competitors.

Telecommunications Expansion Contracts Due to Decline in Economy

The economic recession that has affected the world economy since early 2008 has forced telecommunications companies to cut back spending, potentially reducing the number of new contracts for Ciena. In December of 2008, Ciena's largest customer, AT&T, announced it was cutting 12,000 job, or about 4% of its workforce. AT&T also announced that, moving into 2009, they were cutting capital spending.[15] This is reflected in Ciena's second quarter results, which were down from the previous year and came in far below Wall Street's expectations.[16] If the recession continues deeper into 2009, further cuts by Ciena's main customers in employment and expansion will potentially slow Ciena's growth.


Some of Ciena's main competitors include:

  • Alcatel-Lucent (ALU-FR) Alcatel and Lucent merged in 2006 to create one of the largest telecommunications equipment vendors in the world with $21.8 billion in 2009 consolidated revenue.[17]
  • Cisco Systems (CSCO) Cisco is the worldwide leader in data-networking equipment and software, generating nearly $36.1 billion in revenue in FY 2009.[18]
  • Nortel Networks (NT) Nortel is a global supplier of networking hardware, software, and services designed to improve the way consumers and businesses communicate. It filed for bankruptcy in 2009.[19]

While Ciena is a much smaller firm in size compared to its main competitors, its gross margins were higher than those of Alcaltel-Lucent, and remain strongly competitive due to its proprietary technologies.[20]


  1. http://www.moneymorning.com/2009/05/18/ciena-corp/
  2. http://www.secinfo.com/dsvRq.t4Zq.htm#_102
  3. http://reclaimthemedia.org/broadband/cable/obama_adviser_eyes_governmentb2722
  4. Seeking Alpha: Cisco Internet Traffic to Boom?
  5. http://gigaom.com/2008/12/04/with-att-job-cuts-telco-recession-is-official/
  6. http://www.marketwatch.com/story/gdp-set-for-4th-straight-decline-economists-say-2009-07-26
  7. Reuters: Ciena Corporation Company Profile
  8. Ciena Corporation Investor Relations: "Ciena Reports Unaudited Fiscal Second Quarter 2010 Results" June 9, 2010
  9. http://www.moneymorning.com/2009/05/18/ciena-corp/
  10. http://reclaimthemedia.org/broadband/cable/obama_adviser_eyes_governmentb2722
  11. http://news.cnet.com/8301-13578_3-10215603-38.html
  12. http://www.dtc.umn.edu/mints/home.php
  13. http://www.strangelove.com/blog/tracking-growth-rate-youtube-online-video
  14. http://seekingalpha.com/article/81653-cisco-internet-traffic-to-boom?source=feed
  15. http://gigaom.com/2008/12/04/with-att-job-cuts-telco-recession-is-official/
  16. http://www.fool.com/investing/general/2009/06/05/strike-three-is-ciena-out.aspx
  17. http://www.sec.gov/Archives/edgar/data/886125/000130817909000033/alcatel20f.htm
  18. http://www.cisco.com/web/about/ac49/ac20/ac19/ar2008/financial_highlights/index.html
  19. http://www.sec.gov/Archives/edgar/data/1119664/000119312509042559/d10k.htm#wrap17831_24
  20. http://finance.yahoo.com/q/co?s=CIEN
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki