ONI Lowers Guidance

SAN JOSE, Calif. -- ONI Systems Corp. (Nasdaq:ONIS - news), a leading provider of optical telecommunications systems for metropolitan access, core and regional markets, today provided an update on its business outlook and revised its financial outlook for the third and fourth quarters of fiscal year 2001. The Company also summarized actions that it plans to take to address current business conditions. ONI believes that the recent worldwide, deteriorating economic environment in the telecommunications market has impacted the capital deployments of next generation metropolitan optical equipment. As a result, ONI expects revenues in the range of $40 to $50 million for the third quarter which will end on September 30, 2001, down from its previous revenue guidance of $75 to $80 million. Pro forma net loss for the quarter is expected to be in the range of a loss of $(0.17) to $(0.21) per diluted share, excluding restructuring and non-recurring charges discussed below and non-cash charges related to the amortization of deferred stock compensation and goodwill. ONI expects fourth quarter revenue to be in the range of $40 to $50 million, which was previously expected to be in the range of $85 to $90 million. As a result of the revised revenue expectations for Q4, ONI also stated that it would not break even on continuing operations in the fourth quarter, as previously projected. The Company also indicated that it now expects its total customer count at year's end to be 28-30 customers versus the earlier estimates of 32-34 customers.ONI Systems Inc.