By Angela Chen
Ciena Corp. reported a surprise loss in the October quarter, as
revenue growth in its biggest network segment was unable to offset
expected hits from a supplier agreement with AT&T Inc.
Shares fell 3% in premarket trading.
The telecom-equipment maker had earlier warned that uncertainty
tied to the timing of potential orders, as well as concessions
related to its recent supplier agreement with AT&T would dent
its revenue in for the fourth quarter.
Early-stage network deployment and other related costs could put
pressure on margins, while certain upfront incentives and
concessions as part of its agreement to be a Domain 2.0 supplier
for AT&T will have a disproportionate impact on the quarter's
revenue and margins. These are expected to be short-term
factors.
Higher demand in the optical-gear market has been helping the
company improve its revenue in recent periods. Ciena has also
upgraded and diversified its offerings while broadening its base of
customers.
For the fourth quarter ended in November, Ciena posted a loss of
$30.7 million, or 29 cents a share, compared with a loss of $9.8
million, or nine cents a share, a year earlier. Excluding special
items, the loss became eight cents a share, compared with a profit
of 16 cents a share a year earlier.
Analysts polled by Thomson Reuters had called for 12 cents a
share in earnings.
Revenue ticked up 1.3% to $591 million, in line with the
company's projection of between $570 million to $610 million, and
slightly above analyst predictions of $589 million.
Converged packet optical revenue, Ciena's biggest top-line
contributor, grew 9.2% to $383 million. Software and services
revenue climbed 5,1% to $125 million.
For the current quarter, Ciena expects revenue of $540 to $570
million. Analysts had called for $567 million.
Write to Angela Chen at angela.chen@dowjones.com
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