& cplSiteName &

Ciena Soars on Strong Demand

Ray Le Maistre
6/6/2014
50%
50%

Ciena spread some cheer for the optical transport sector Thursday following a strong second fiscal second quarter that defied concerns about AT&T's capex strategy, and an outlook that suggested even better times ahead. (See What's With AT&T's Capex Dip?)

Its numbers also put a smile on the face of its investors, as the vendor's share price jumped by $3.49, or 18.4%, Thursday to $22.48.

Ciena Corp. (NYSE: CIEN) reported revenues of $560 million for the three months to the end of April, up 10.3% from a year earlier. Net loss was $10.2 million, better than a year ago, while adjusted net income (after one-time costs are stripped out) was $19.4 million, and adjusted gross margin edged up to slightly to 43.1%. All these numbers were slightly better than expected. (See Ciena Reports Growth in Fiscal Q2 .)

One customer, believed to be AT&T Inc. (NYSE: T), generated a hefty 21.5% of total revenues in the quarter (about $120 million). Ciena's CEO, Gary Smith, said during the company's earnings conference call that the vendor's engagement with AT&T is spread across many parts of the operator's business, including its metro networks, optical backbone, submarine links, and mobile backhaul, supporting all manner of residential, enterprise, wholesale, and managed services.

What is encouraging for Ciena, though, is that these latest numbers don't look like a blip. The company is expecting fiscal third-quarter revenues in the range of $585-$615 million, significantly better than expected, while Smith repeatedly stressed how the company's customer base is expanding, so reducing its reliance on the Tier 1 operators in the US.

"As we continue to diversify our business, we expect to deliver steadily improving financial performance, including performance in the second half of the year that is stronger than the first half," said the CEO in the company's earnings announcement.

That broadening customer base, significantly, includes sales to customers beyond the traditional telecom operator segment: Ciena now generates about 30% of its sales from non-telco customers, including web services firms and data center operators that need high-capacity connectivity between data centers, cable operators (Ciena signed three new customers in the quarter), government agencies, and large enterprises in vertical markets such as financial services, utilities, and healthcare.

"We're helping customers drive service creation through models such as carrier managed services, and applications such as cloud services, data center interconnection and other applications that grow carrier revenues," said Smith during the earnings conference call Thursday.

The vendor is also growing its business in the submarine networks sector, and expects its business outside the US market to grow in the future as its partnership with Ericsson starts to deliver new business. In the fiscal second quarter, 42% of revenues came from non-US customers. (See How Will Ciena + Ericsson Play Out? and Ericsson's Ciena Tieup: It's a Migration Thing.)

The driving force for Ciena, though, is 100G. Revenues from its packet/optical portfolio, including 100G products, grew 22% year-on-year to $357 million, and Ciena said during its conference call that it had added 15 new 100G customers to take the total to 129.

In addition, MNM Partners analyst Mike Genovese pointed out that about 20% of its 100G revenues are now from metro network-related products, a sign that the metro 100G market is starting to ramp up. (See The Rise of 100G & Terabit Transport Networks.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading


Want to learn more about the evolution of packet-optical transport and the 100G market? Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see the BTE schedule.


(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
smkinoshita
50%
50%
smkinoshita,
User Rank: Light Sabre
6/6/2014 | 1:30:45 PM
Re: Long build-up...
@Ray:  How much would you hedge your bets on 100G Products?  I feel that there could be more growth from non-US customers.  Just speaking as a Canadian.
Ray@LR
50%
50%
Ray@LR,
User Rank: Blogger
6/6/2014 | 8:31:08 AM
Long build-up...
Ciena has been talking about a market uptick for quite a while -- what would be really impressive is if the company can set itself up for long-term stability and profitability, and not just a couple of good quarters. It does appear, though, that the likelihood of sustained business does look more likely now thahn in the past, and if Ciena pulls it off then it will be a credit to its strategy of the past few years.
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
Alan Bateman, Director, Agile Transformation
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Between the CEOs
CEO Chat: UXP Systems' Gemini Waghmare

8|26|16   |     |   (0) comments


Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Google Fiber Can't Be Called a Failure
Carol Wilson, Editor-at-large, 8/26/2016
FirstNet: A Billion-Dollar Boondoggle?
Dan Jones, Mobile Editor, 8/26/2016
WiCipedia: Should Men Be Included? & Olympians Face Discrimination
Eryn Leavens, Special Features & Copy Editor, 8/26/2016
How the Padres Hit an IoT Home Run
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/25/2016
Google Fiber Downsizing Not Confirmed
Mari Silbey, Senior Editor, Cable/Video, 8/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.