Ciena reported earnings this morning. Revenues and EPS were both pretty much as expected, at $253.2M and $0.37. However, the company gave guidance for their fiscal Q4 of just $190-210M, some 20-25% below what the street was expecting, or at least what was listed on yahoo finance as the analyst consensus. The company gave the following reason:
“In addition to existing customer-specific challenges, we have recently begun to experience order delays from many of our Tier One service provider customers, which we attribute to their guarded approach to capital expenditures given the uncertain macroeconomic environment,” said Smith. “While we’ve seen no project or order cancellations, sales cycles are lengthening and some deployments are slowing. As a result, we now expect fiscal fourth quarter revenue in a range of $190 to $210 million.”
Well, I guess that's the equipment side of telecom for you. One quarter everything is fine, then all your customers decide to delay purchases a bit. Simultaneously. And your revenues drop sequentially by 25% overnight. Of course, when things are good, the reverse could happen - it makes for a hard sector to analyze.
So, does this mean that AT&T and Verizon are slowing down the nextgen rollouts of their backbone? Are those 40G systems going to be eclipsed by 100G before ever getting started after all? Or does it simply mean that Ciena (or the analysts covering them), like Infinera before them, simply had rose colored growth glasses on until now? Lots of conflicting datapoints these days, earning season starts again in 6 weeks or so but until then we'll just have to wait and see.
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