Networking equipment vendor Ciena (NASDAQ:CIEN, news, filings) pre-announced some preliminary results for the company's fiscal first quarter, which ended January 31. The verdict can be summed up in one word: Yuck.
Revenues are now expected to be about $415M, or a full $30M below the midpoint of guidance ($435-455M). The street had been looking for something closer to the high end of guidance, according to Yahoo Finance. CEO Gary Smith said that the combined effects of seasonality and longer deployment cycles combined to delay recognition on "a few solutions-oriented projects with new customers, especially in international markets." Despite the shortfall, the company doex expect to generate positive free cash flow.
Ciena's difficult quarter seems to have followed a similar trajectory as that of Juniper Networks (NASDAQ:JNPR, news, filings) recently except for where the softness came from. I maintain however that part of what we are seeing here comes simply from a resurgent Cisco and Alcatel-Lucent, which has given both companies' customers some more options to consider of late and made closing deals more difficult than a quarter or two ago. There doesn't seem to be an underlying economic retreat.
Ciena will formally report its fiscal Q1 in two weeks on March 7, though now there won't be as much drama when that time rolls around. The stock is off 6% in the pre-market, but it's early yet. It had been trending up steadily to $17 over the space of the the quarter after dipping below $11 in mid-December.
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