Network equipment provider Ciena (NASDAQ:CIEN, news, filings) reported earnings today, and while the forecast is for improving weather their results show that it is definitely still raining outside. Fiscal Q2 revenues of $144.2M were down almost 14% sequentially and 40% over the same quarter last year. That's definitely nothing to write home about, almost everyone expected a decline but not that big. The company reported a loss of $503M, but most of that was on a $456M goodwill charge which doesn't really mean very much at the moment. However, adjusted net loss of $0.25/share was still not a happy number.
Looking forward, the company does expect sequential growth in Q3 "based on our direct conversations with customers and supported by trends we are seeing currently in the business, including recently improved order flow" according to CEO Gary Smith. Most of Ciena's second quarter came before we started hearing less ugly things about the future from carriers, so I didn't really expect to see any rays of sun breaking through just yet in Ciena's results. That they also see things improving in the 2nd half is encouraging to hear, but wow their revenue freefall has been nasty over the last four quarters hasn't it?
Back in September, Ciena's results were one of the early indicators that disaster was coming. I keep hoping that they will be an early indicator of the recovery as well, but if so then we have another quarter to wait. That being said, Ciena remains financially bulletproof with over $1B in cash and short term investments. When the pendulum finally swings the other way they will be ready.
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