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Ciena (CIEN)
Ciena Closes Quarter with a Loss
Ciena Corporation announced today that it posted better-than-expected results for its third fiscal quarter. Although Ciena reported a $26.5 million dollar loss, it still managed to beat out Wall Street expectations. The telecommunications equipment manufacturer toppled analysts' $152.6 million revenue prediction with a $164.8 million performance. Ciena also cautiously noted that its fourth quarter performance will probably be stagnant despite the promising third quarter improvement. The company's shares have jumped up 6.8% in early market trading. What were the causes behind Ciena's bitter-sweet quarter results? What does this quarter mean for the company's future?
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| Stock Analysis |
The recent economic downturn has really hurt the Ciena Corporation. The network equipment seller does a majority of its business with telecommunication companies such as AT&T, Sprint Nextel Corporation, and Verizon Communications, which have been forced to cut back spending due to the struggling economy. As a result, Ciena has seen a significant drop in sales. The telecommunications equipment manufacturer has combated this dip in demand with a strict cost and expense reduction plan. However, Ciena's sales began to pick up towards the end of the quarter as talks about the economy entering a recovery phase grew. Industry speculation indicates that most telecommunication companies plan to increase network spending in anticipation of a rise in consumer demand as the recession wanes. However, Ciena is not so quick to buy into the hype.
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Ciena Corp. is very wary of making any premature assumptions. Ciena's recent increase in sales may be perceived as a sign that industry spending is trending upward, but nothing is for certain. The network equipment seller has opted to take a very conservative outlook on the upcoming quarters. Ciena realizes that a large portion of its success is dictated by the telecommunication service providers, and as a result is hesitant to forecast based on factors out of its control. Ciena is hoping that the industry's optimism translates into increase spending by its customers.
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Ciena Commentary:
How the iPhone Is Driving a Wireless Bandwidth Boom - A blogger's explanation as to why the iPhone is causing telecommunication providers to bolster their service capabilities.
Endless Summer: AT&T Has Three Weeks To Fulfill Its MMS Promise - The approaching MMS deadline that AT&T (T: Charts, News, Offers) faces may be an indicator that it needs to invest more money in its network in order to support the promised functionality. Ciena Corporation would be more than happy to help AT&T solve this problem.
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Family Dollar Sales Miss Goals; Shares Fall - Family Dollar (FDO: Charts, News, Offers) was hurt by its store reorganization efforts. Find out why this decision had such a negative impact on its performance.
Kansas to Receive $6M from Pfizer Settlement - Pfizer (PFE: Charts, News, Offers) crosses the line with Medicaid fraud and ends up paying the price.
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Profile |
Click here to view a detailed profile of Ciena.
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