Ciena takes $160 million loss

Despite making a win with Mexico’s Telmex during the quarter, things don’t appear to be getting better for Ciena Corp. Today the company reported its third-quarter results, in which the company lost $160 million, or $0.42 a share, on revenue of $50 million.

Ciena had a net income of $5.7 million in the year-earlier quarter, on revenue of $458.1 million. Revenue for the second quarter of this year was $87.1 million.

The company completed its ONI Systems acquisition during the quarter and took a restructuring charge of $18.6 million. Of added note, was $1.2 million in credit to doubtful accounts. The company also took a $41.2 million charge related to excess inventory with its long haul transport products and non-cancelable purchase orders with suppliers.

The company plans to eliminate 110 jobs in the next three months.

“We are disappointed with the quarter’s revenue of $50 million,” said Gary Smith, CEO of Ciena. The results as a whole and the CoreDirector switch revenues were less than expected because of slow acceptance by Telmex, Smith said.

And according to Smith, while metro revenue was down from the second quarter, it may be less affected than core spending. Additionally, Smith expects spending in the metro area to rebound before the core.

“Core revenue was up slightly,” Smith said. “But that’s not representative of the change in momentum in the space,” he said. Ciena’s CoreDirector switch will be the largest revenue contributor for the year though, according to Smith.

And while Ciena recently passed OSMINE certification for its CoreDirector product, the company doesn’t expect to see RBOCs migrating from classic Sonet add/drop multiplexers to the CoreDirectors very soon.

“CoreDirector and K2 are [getting] a lot of interest in Europe,” Smith said. “We continue to be confident with CoreDirector traction particularly in Europe and Asia as well.”

K2 is Ciena’s metro multiservice Sonet/SDH platform.