Light Reading

Ericsson Gives Ciena a Boost

Ray Le Maistre
6/1/2006
50%
50%

Ciena Corp. (NYSE: CIEN) sent out a big "Thank You" to Ericsson AB (Nasdaq: ERIC) today as it exceeded second quarter expectations and saw its share price edge up 15 cents, nearly 3.5 percent, to $4.45 in morning trading.

Ciena reported revenues of $131.2 million, up 26 percent from a year earlier, and a net loss of $1.9 million, or $0.00 (nil) per share, a considerable improvement on the $74.8 million loss (13 cents per share) from a year ago.

After one-time items, Ciena recorded an adjusted net income of $3.6 or 1 cent per share. Analysts, on average, had expected an adjusted net loss of $0.01 per share from revenues of $129.1 million.

So what's Ericsson got to do with it? Well, Ciena had three customers that contributed more than 10 percent of revenues in the second quarter – two North American carriers – not directly named but obtusely identified as AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ) – and one international channel partner, which was the Swedish vendor.

That means in the three months leading to April 30, 2006, Ericsson contributed more than $13.1 million in revenues to Ciena. Ericsson hasn't previously been a 10 percent-plus customer.

On today's conference call, Ciena management said Ericsson is selling almost a full range of Ciena equipment, but sales of the multiservice CN 4200 FlexSelect platform account for the majority. Ericsson is the sales channel partner for the 4200's deployment at Swisscom AG (NYSE: SCM). (See Ciena Claims DWDM Coup.)

The 4200 has been particularly popular in Europe, where BT Group plc (NYSE: BT; London: BTA) is another customer. (See Ciena Launches Mini CN 4200, Ciena Wins in Slovenia, Ciena Wins in Denmark, and Ciena Finalizes BT Agreement.)

Those wins helped push revenues from the 4200 to $12 million in the second quarter, up from $2 million in the previous three months. And CEO Gary Smith says Ciena's gearing up its supply chain for quarterly sales of $40 million for the 4200 product. He says the technology is being used by a broad range of customers, including cable operators, government institutions and enterprises, as well as traditional telecom operators.

According to Smith, 4200 revenues are expected to grow sequentially and hit the $40 million mark in early to mid 2007.

The success of that product, the first based on the FlexSelect DWDM platform unveiled a year ago, means there will be further product launches in the near future in addition to the smaller version of the 4200 (the CN 4200 MC) launched a few weeks ago. (See Ciena Shrinks Its Hot CN 4200 and Ciena Launches FlexSelect.)

Smith reports that there will be further expansion of the 4200 product, while CTO Steve Alexander told analysts on today's conference call that Ciena will be "rolling out additional features of FlexSelect in the next few quarters" to meet the growing needs of carriers that want to migrate from their existing networks to next generation architectures, but can't predict how quickly they will want to scale down or ramp up particular technologies.

"FlexSelect customers don't need to know the timescales for migration – they only need to know they will eventually migrate," stated the CTO, who added that the CN 4200MC was just the first of a number of new products "you'll be hearing about soon."

Ciena's CFO Joe Chinnici also looked into his crystal ball, telling analysts that Ciena was on course to record third quarter revenues between 7 and 10 percent higher than the second quarter, setting the range between $140.4 million and $144.3 million. On average, analysts had expected third quarter revenues of $137.6 million.

Ciena reported higher than normal gross margins in the second quarter of 48 percent, with Smith saying the company should settle down to an average quarter-by-quarter gross margin rate in the mid forties. He noted that a year ago Ciena reported a gross margin of 26 percent.

— Ray Le Maistre, International News Editor, Light Reading

(3)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
materialgirl
50%
50%
materialgirl,
User Rank: Light Beer
12/5/2012 | 3:52:47 AM
re: Ericsson Gives Ciena a Boost
If the engineers on the 4200 are all gone, how long will these sales last? Why would anyone base a network build on a box with no sustaining engineering?
Honestly
50%
50%
Honestly,
User Rank: Light Beer
12/5/2012 | 3:52:45 AM
re: Ericsson Gives Ciena a Boost
Girly, can't you find something else to do. Who do you work for.? Safe to say not Ciena. They had a great qtr and the space as was seen in SCMR's report is on the comeback.

Does not appear that engineering is a problem, in fact they are rolling, so chill.
materialgirl
50%
50%
materialgirl,
User Rank: Light Beer
12/5/2012 | 3:52:11 AM
re: Ericsson Gives Ciena a Boost
Honestly,
When will you grow up and learn to keep your personal gender problems off these message boards? The engineers are evidentally gone, so why trust one quarter's numbers?
From The Founder
Against the odds, Huawei is growing its telecoms networking equipment business in the US -- that should be ringing some alarm bells for domestic vendors.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Between the CEOs
Metaswitch's New CEO Martin Lund Discusses His Role

9|2|15   |   11:27   |   (2) comments


Technology industry veteran Martin Lund joins Metaswitch Networks this week as the company's new CEO. In this interview, Lund discusses his new role and the industry's progress with Light Reading CEO Steve Saunders. Lund believes that the industry disruption caused by SDN and NFV is creating opportunities for companies like Metaswitch – network software providers ...
Telecom Innovators Video Showcase
Nominum on Leveraging the Power of DNS to Deliver Superior Subscriber Experiences

9|2|15   |   07:13   |   (0) comments


Nominum CEO Gary Messiana talks about the challenges service providers face in competing for a much more sophisticated customer, a customer that has heightened expectations for more personalized and compelling digital experiences. Providers are focusing their efforts on delivering higher value subscriber services, retaining their existing customers and increasing ...
Between the CEOs
CEO Chat With Jeff Miller, ActiveVideo

8|28|15   |   19:05   |   (0) comments


Jeff Miller, President and CEO of ActiveVideo, talks to Light Reading founder and CEO Steve Saunders about the impact of virtualization on the TV and video distribution market.
LRTV Huawei Video Resource Center
Vodafone: Mobile Money Is About Customer Trust

8|27|15   |   06.36   |   (0) comments


Light Reading spoke with Vodafone's Ian Ravenscroft about the unique responsibilities and opportunities facing operators handling customers' financial transactions over the network.
Telecom Innovators Video Showcase
Palo Alto Networks on Expanding in the Carrier/Service Provider Market

8|26|15   |   07:54   |   (0) comments


Alfred Lee from Palo Alto Networks tells Steve Saunders about their new chassis-based system, the PA-7080, and how it can benefit service providers compared to legacy firewalls.
LRTV Custom TV
Global Services Forum Preview

8|25|15   |   02:36   |   (0) comments


Light Reading's CEO and Founder Steve Saunders talks about Huawei's upcoming Global Services Forum with the help of Heavy Reading's Patrick Donegan and Teresa Mastrangelo.
Telecom Innovators Video Showcase
Infoblox on DNS Threat Index

8|19|15   |   04:39   |   (0) comments


Dilip Pillaipakam from Infoblox talks to Steve Saunders about his company's core network services.
Between the CEOs
CEO Chat With Ihab Tarazi, Equinix

8|14|15   |   20:18   |   (1) comment


Equinix CTO Ihab Tarazi talks to Light Reading founder and CEO Steve Saunders about the dramatic changes in the data center, cloud and interconnect markets and discusses the impact of SDN and NFV in the coming years.
Telecom Innovators Video Showcase
The Netformx Ecosystem

8|14|15   |   09:39   |   (1) comment


Ittai Bareket, CEO of Netformx, talks with Steve Saunders about the Netformx Ecosystem, which employs cutting-edge prescriptive analytics to help solution providers maximize profits.
Telecom Innovators Video Showcase
Versa Networks on Leveraging VNFs

8|12|15   |   07:37   |   (0) comments


Kumar Mehta, founder and CEO of stealth mode startup Versa Networks, talks with Steve Saunders about how providers can best leverage virtualized network functions (VNFs).
LRTV Custom TV
Transforming the Network Through OPNFV

8|5|15   |   7:09   |   (0) comments


Sandra Rivera, VP Data Center Group; GM Network Platforms Group, Intel Corporation, on OPNFV Arno and how the industry is coming together to accelerate the deployment of NFV and transform the network.
LRTV Huawei Video Resource Center
Huawei ONS Product Demo

8|3|15   |   6:01   |   (0) comments


Huawei shows at Open Networking Summit 2015 in Santa Clara how its SDN and NFV solutions embrace openness.
Upcoming Live Events
September 16-17, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 16, 2015, The Westin Galleria Dallas, Dallas, TX
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Infographics
Cisco's cloud and virtualization portfolio can increase business agility and innovation by building a more flexible network architecture.
Hot Topics
T-Mobile CEO Plays Data Traffic Cop
Sarah Thomas, Editorial Operations Director, 8/31/2015
CEO Chat With Bill Gates
Steve Saunders, CEO and founder, Light Reading, 8/31/2015
Time to Monetize Cable WiFi
Alan Breznick, Cable/Video Practice Leader, 8/31/2015
New Apple TV: More $$, Not Content – Report
Mari Silbey, Senior Editor, Cable/Video, 8/31/2015
Ex-AlcaLu Boss Tasked With Bolstering Altice
Iain Morris, News Editor, 9/1/2015
Like Us on Facebook
Twitter Feed
September 16, 2015
Wi-Fi First or Second?
September 22, 2015
Media Begins With “Me”
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Technology industry veteran Martin Lund joins Metaswitch Networks this week as the company's new CEO. In this interview, Lund discusses his new role and the industry's progress with Light Reading CEO Steve Saunders. Lund believes that the industry disruption caused by SDN and NFV is creating opportunities for companies like Metaswitch – network software providers with the agility to embrace new technologies quickly and the ability to deliver on substantial projects for global network operators.
The scene: Last Saturday, lunchtime, the interior of a shi-shi-foo-foo eatery in Manhattan's SoHo district.
Cats with Phones
It's a New Age... Click Here
When smartphones replace stuffed animals.