Ciena Corp. (NYSE: CIEN) showed just how brutal the telecom equipment market has been during the past year by reporting full year revenues of $652.6 million (to October 31), down 27.8 percent on fiscal 2008's $902.5 million. (See Ciena Reports Q4.)

The optical and carrier Ethernet equipment vendor, which will see its revenues more than double when it completes the acquisition of Nortel Networks Ltd. 's Metro Ethernet networks unit, reported fiscal fourth-quarter revenues of $176.3 million, better than Wall Street's expectations and roughly in line with the same quarter a year earlier. (See Ciena Beats NSN to Buy Nortel's MEN and Slowdown Smacks Ciena.)

Analysts had, on average, been expecting fourth-quarter revenues of $167.7 million.

AT&T Inc. (NYSE: T) is still providing a fat slice of that business: Ciena said a "single, North American-based customer accounted for 19 percent of total fiscal fourth quarter revenue and 20% of total fiscal year revenue, and was the only greater-than-10 percent contributor for the quarter and the fiscal year."

Fourth quarter non-GAAP net loss (after one-time costs) was $10.7 million, or 12 cents per share, worse than the 7 cents per share analysts had expected.

The vendor's share price dipped by $0.86, or 6.5 percent, to $12.37 in early morning trading.

The company expects its revenues to creep up again in the current period by as much as 5 percent: A sequential increase of 0 to 5 percent would put revenues in Ciena's fiscal 2010 first quarter (ending January 31, 2010) at $176 million to $185 million.

After that, Ciena should start to see revenues from Nortel's MEN unit kick in, as the deal is set to close during the first three calendar months of 2010. (See NSN Hopes Dashed as Ciena/Nortel Deal OK'd.)

But along with the revenues from the MEN business -- the Nortel unit generated $998 million during the first nine months of this year -- come the costs of seeing the deal through: Ciena estimates that integrating MEN, including all transaction and associated IT costs of adding the Nortel unit onto the existing business, will come to $180 million.

Ciena CEO Gary Smith said on today's earnings conference call that, without those costs, the addition of MEN should be positive to Ciena's earnings in fiscal 2010 (November 2009 to October 2010). However, with those costs included, adding MEN to the business is expected to have a negative impact on Ciena's next financial year.

But Smith and his crew are still very positive about the outcome, and still talk about Ciena, which has some new products set to launch into the market soon, being very well positioned to expand its business as carriers spend more on adding capacity to their networks and building out new wireless backhaul capabilities. (See Gary Smith, CEO, Ci-MEN-a, Ciena/Nortel: Oh Yes, There's Overlap, and Ciena Catches Packet/Optical Convergence Bug.)

— Ray Le Maistre, International News Editor, Light Reading