By Rex Crum, MarketWatch
SAN FRANCISCO (MarketWatch) -- It was a case of rising costs and
a weaker-than-expected quarterly profit outweighing sales gains
from Ciena Corp. Thursday that sent the networking-equipment
maker's stock into the red following the company's fiscal
fourth-quarter results.
Ciena (CIEND) fell as much as 6%, to as low as $21.51 a share,
after the company reported an quarterly loss of $9.8 million, or 9
cents a share, on revenue of $583.4 million, compared with a loss
of $38.8 million, or 39 cents a share, on $465.5 million in sales
in the same period a year ago. Excluding one-time items, Ciena
would have earned 16 cents a share.
Analysts surveyed by Thomson Reuters had forecast Ciena to earn
24 cents a share on $568 million in revenue.
Ciena said gross margins as a percentage of revenue fell to
39.7% from 41.3% a year ago. Operating expenses also rose to $232
million from $214 million in last year's fourth quarter.
Ciena Chief Executive Gary Smith said that the initial market
reaction should be taken with a grain of salt.
"All of our [business] metrics performed strongly," Smith said.
"We've got record backlog [of orders] and a lot of engagement with
carriers around the world."
For its current fiscal first quarter, Ciena forecast revenue in
a range of $515 million to $545 million, while analysts had
forecast the company to post sales of $538 million.
With Ciena losing ground, other companies in the networking
sector also went into the red. Cisco Systems Inc. (CSCO) was down
by 2.5% at $20.36 a day after Citigroup started coverage of the
networking giant with a sell rating. Juniper Networks Inc. (JNPR),
F5 Networks Inc. (FFIV) and JDS Uniphase Corp. (JDSUD) were also in
the red.
Separately, Ciena said it would transfer its stock listing to
the New York Stock Exchange from the Nasdaq (RIXF) on Dec. 23. The
tech-heavy Nasdaq Composite Index was off by 5 points at 3,998,
while the Philadelphia Semiconductor Index (SOX) also dipped into
the red.
Among other leading tech companies, Facebook Inc. (FB) rose more
than 4%, to $51.63 a share, as the social-networking giant said it
would be added to the S&P 500 Index (SPX). The move was seen as
a mixed blessing in some quarters, based on the historical
performance of companies that replace others in the closely watched
stock index.
Microsoft Corp. (MSFT) was off by 15 cents a share at $37.45
following reports that Ford Motor Co. (F) CEO Alan Mulally might
not be the leading candidate to replace retiring CEO Steve
Ballmer.
More must-read technology news from MarketWatch
Microsoft's Surface 2 may be a holiday hit
Apple's share of China's smartphone market jumps in October
Here's what you'll save by ditching cable TV
Subscribe to WSJ: http://online.wsj.com?mod=djnwires