Ciena Cuts 200 Jobs as Sales Plummet
The news also prompted a 6.4 percent pre-market fall in Ciena's share price to $5.00.
The job cuts will affect all parts of the company in every market, the vendor noted. And as part of its cost-cutting measures, Ciena is shutting its Acton, Mass., research-and-development facility within the next four months.
The vendor had warned previously that it would cut its cost base if the market deteriorated. (See Ciena: This Ain't No 2001! and Slowdown Smacks Ciena.)
And it's clear that, for Ciena at least, current trading is getting much tougher.
It reported revenues for its fiscal first quarter (ended January 31) of $167.4 million, down a massive 26 percent from a year earlier. Analysts had forecast a significant fall but, on average, had expected sales to come in at nearly $172 million.
The company reported a net loss of $24.8 million. In the same period last year, Ciena reported a profit of $28.8 million.
The vendor's net loss after one-time costs (also known as non-GAAP net loss) was $8.3 million, or 9 cents per share, 2 cents worse than Wall Street's finest had expected.
Ciena believes the latest round of cuts will bring its adjusted operating expenses (opex) down to $80 million per quarter. Previous efficiency measures had reduced adjusted opex to $84.4 million in the fiscal first quarter from $96.2 million in the prior quarter.
Cash conservation is key to Ciena's operating strategy at the moment. "We are managing our business with the expectation that current macroeconomic realities will continue to pressure our customers’ spending levels,” stated CEO Gary Smith in a prepared statement.
One of the company's main customers is AT&T Inc. (NYSE: T), which recently announced it plans to cut its 2009 capex budget by up to 15 percent. (See AT&T Cuts Capex by up to $3B.)
With carrier spending patterns up in the air, Ciena isn't providing any financial outlook. "With the current macroeconomic and industry volatility, and as our customers continue to delay and more carefully scrutinize capital expenditures, our short-term visibility is extremely limited. As a result, we are not in a position to provide revenue guidance for the fiscal second quarter 2009," stated Smith, who is still chipper about the future.
"We remain confident in the fundamental demand drivers of our target markets and focused on our long-term goal of emerging from this challenging period positioned to drive future revenue and EPS growth," he said.
Ciena ended January with more than $920 million in cash, cash equivalents, and short-term investments.
— Ray Le Maistre, International News Editor, Light Reading