UPDATE 3-Ciena's results miss expectations, shares fall
* Adjusted Q1 shr loss $0.12 vs Street view loss $0.06
* Q1 revenue $175.9 million vs Street view $184.6 million
* Deal for Nortel assets on track for closing
* Ciena shares down 7 percent (Adds analyst comments, executive interview)
By Paul Thomasch
NEW YORK, March 4 (Reuters) - Telecommunications network equipment maker Ciena Corp (CIEN.O) posted a wider-than-expected quarterly loss and revenue that missed Wall Street expectations, sending its shares down 7 percent.
The company said delays in revenue recognition related to the deployment of new platforms for some customers hurt its results, even as phone companies upgraded their networks to handle growing Web traffic, including on smartphones.
Ciena, which is set to buy a unit of Nortel Networks Corp (NRTLQ.PK), also forecast current-quarter revenue of $185 million to $195 million before the combination. The average analyst forecast is $194 million, according to Thomson Reuters I/B/E/S.
"Although we are not surprised that the stock comes under pressure considering the high expectations, we imagine investors will look past light sales to a consistent outlook for the April quarter and long term opportunities," Morgan Keegan analyst Simon Leopold said in a note.
He added, however, that the Nortel deal raised concern in his mind about "significant sales challenges" and the "risk from product overlap."
Ciena Chief Executive Gary Smith, who predicted the Nortel deal would close later this month, said some of the first quarter's delayed revenue would show up in the the current quarter, while the market was showing signs of improvement.
"Overall, I would say sentiment is improving, certainly in North America," Smith said in an interview. "I would describe Europe as country-specific and patchy."
As for Ciena's major customers -- a roster that includes carriers like AT&T (T.N) and Verizon Communications (VZ.N) -- demand for mobile and video services continues to grow and require investment, he said.
"While global market conditions still indicate some uncertainty, we see some signs of improvement, particularly in North America," he said.
He said the company is witnessing a "strong order flow."
At the moment, Ciena is not forecasting results that take into account the Nortel deal. Guidance that includes the acquisition probably will not come before an investor day in April, analysts said. Ciena is paying about $769 million for the division in a deal that will double its size.
The supplier of optical switches and other equipment used to direct Internet traffic posted a net loss of $53.3 million, or 58 cents per share, for its fiscal first quarter that ended Jan. 31, compared with a loss of $24.8 million, or 27 cents a share, in the same quarter a year before.
Excluding unusual items, the loss was 12 cents a share, compared with Street expectations for a loss of 6 cents.
Revenue rose 5 percent to $175.9 million, less than the average analyst estimate of $184.6 million.
Shares of Ciena fell 5.6 percent to $13.73 in trading on Thursday, recovering from an earlier low of $13.04. (Additional reporting by Ritsuko Ando and Tiffany Wu, editing by Maureen Bavdek, John Wallace and Robert MacMillan)
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