Ciena wows Wall Street

(Telephony) Ciena has become Wall Street’s favorite son today, beating expectations in its first fiscal quarter and upping guidance for the remainder of the year.

For the quarter ending Jan. 31, the company reported revenues of $352 million and earnings per diluted share of 18 cents, beating estimates from First Call/Thompson Financial by 3 cents per share.

Ciena’s adjusted net income for the quarter was $54.1 million, up from $41.3 million the previous quarter and from $9.1 million the same quarter last year.

“Growth this quarter was driven again by very, very robust long-distance transport sales,” said Joe Chinnici, Ciena’s chief financial officer. “Within long-distance transport, multiwave CoreStream--our fourth-generation long distance optical transport system--and channel adds for CoreStream were the largest contributors to the quarter’s revenue, with CoreStream-related revenues more than doubling versus the fourth quarter.”

In addition to its strong earnings report, Ciena was upbeat about future performance. Previously, the company projected 11% to 13% revenue growth for the quarter and 75% to 85% growth for the year.

“We now believe it is possible to achieve sequential revenue growth of between 14% to 16% for Q2 and the remainder of fiscal year 2001,” said Chinnici. “Given this guidance, we would expect total fiscal year 2001 revenue growth to be in the wide range of 95% to 105% growth over 2000, an increase of roughly $175 million over our previous guidance.”

This improved guidance is based on the company’s best-ever visibility into future quarters, made possible by the very uncertainty that clouds the outlooks of service providers and other vendors, said Ciena’s Chairman and CEO Patrick Nettles.

“We believe we’re seeing the leading edge of a significant shift in spending from legacy equipment to next-generation equipment,” Nettles said. “We also believe that tighter economic conditions are hastening this shift, as service providers look to spend more wisely on less costly, more efficient networks that enable new revenue-generating opportunities. Ciena’s exclusive focus on this next-generation, intelligent, optical networking equipment positions us as a prime beneficiary of this shift in spending.”

With the high earnings and positive forecasts, Ciena stock has skyrocketed, increasing about 20% to $92.1875 in early afternoon trading.