Light Reading
Ciena beats Wall Street expectations as reseller Ericsson accounts for more than 10 percent of Q2 sales

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
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?
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
Comcast Launches 4K Streaming Service
Alan Breznick, Cable/Video Practice Leader, 12/18/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
Like Us on Facebook
Twitter Feed
Webinar Archive