QUOTE AND NEWS
TheStreet.com  11 hrs ago  Comment 
By David Russell ofaOptionMonster NEW YORK -- Ciena is trying to rebound from its lowest price in almost two years, and the bulls are piling in.a OptionMonster's Heat Seeker tracking system detected the purchase of about 6,400 November 16...
SeekingAlpha  Oct 20  Comment 
By Chris Lau: After Ciena (NYSE:CIEN) lowered its fourth quarter guidance last month, investors are still taking out their frustrations on the company. Ciena traded as low as $13.77 in October, but closed the week at $15.13. Even though the market...
Forbes  Oct 17  Comment 
Bargain hunters are wise to pay careful attention to insider buying, because although there are many various reasons for an insider to sell a stock, presumably the only reason they would use their hard-earned dollars to make a purchase, is that...
Benzinga  Oct 13  Comment 
With demand for increased data services between Europe and Asia expected to grow at an average of 38 percent per year in the next six years1, the Europe India Gateway (EIG) consortium is multiplying the capacity on its international submarine...
Benzinga  Oct 6  Comment 
Sunesis Pharmaceuticals (NASDAQ: SNSS) shares tumbled 69.88% to reach a new 52-week low of $2.00 as pivotal Phase 3 VALOR trial of acute myeloid leukemia treatment did not meet primary endpoint. EZchip Semiconductor (NASDAQ: EZCH) shares touched...
Telecom Ramblings  Oct 1  Comment 
Here's a quick roundup of other news at the midpoint of the week: Ciena has been busy out under the Pacific. Teaming with Vodafone NZ and Southern Cross, they're demonstrating the transmission of uncompressed, encrypted 4k video across 30,000km...
TheStreet.com  Sep 17  Comment 
NEW YORK (TheStreet) -- Telecoms have been replacing copper with fiber optics for decades, but the trend isn't played out yet. Here's how you can make a play on optical fibers and participate in the growth of the backbone of the Internet. Today...
TheStreet.com  Sep 11  Comment 
NEW YORK (TheStreet) -- Shares of optical networking giant Ciena have been under pressure over the past six months. Since the stock hit a 2014 high of $25.38 in March, investors have seen more than 23% of their wealth disappear. But things are...
Benzinga  Sep 10  Comment 
JDS Uniphase Reaffirms Outlook © 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
SeekingAlpha  Sep 9  Comment 
By Chris Lau: Discipline on spending, top line growth, and better margins all should have meant more upside for Ciena (NYSE:CIEN) following quarterly results. The strong quarter added to another string of good quarters investors enjoyed in the...




 

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.

Competition

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]



References

  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