Ciena forecasts weak Q2 sales, shares plunge
(Reuters) - Ciena Corp CIEN.O forecast second-quarter revenue below Wall Street expectations, as the communications equipment maker integrates its back-office operations with the Nortel unit it acquired, sending the company's shares down as much as 13 percent.
First-quarter revenue gained from the acceleration of about $10 million of product shipments into the quarter, the company said on a conference call.
"This dynamic was specifically due to the impending shutdown of our operations early in the second quarter to allow for the integration of Nortel's Metro Ethernet Networks (MEN) business into our back-office systems," the company said on the call.
Ciena completed the acquisition of Nortel Networks' (NRTLQ.PK) Metro Ethernet Networks business -- its largest in 10 years -- in the second quarter of 2010.
Ciena, which supplies optical switches and other gear to AT&T Inc (T.N) and Verizon Communications (VZ.N), forecast second-quarter sales of $415-$435 million.
For the second quarter, the company expects adjusted gross margin to be in the low 40s range.
Analysts on average were expecting sales of $438.5 million, according to Thomson Reuters I/B/E/S.
November-January net loss was $79.1 million, or 84 cents a share, compared with a loss of $53.3 million, or 58 cents a share, a year ago.
It posted a loss of 14 cents a share, excluding items.
Quarterly sales at Ciena, which competes with Alcatel-Lucent (ALUA.PA) (ALU.N), Cisco Systems (CSCO.O), Ericsson (ERICb.ST) (ERIC.O) and Infinera (INFN.O), rose to $433.3 million from $175.9 million.
Linthicum, Maryland-based Ciena shares were down 12 percent at $25.41 on Monday on Nasdaq, with volumes three-times their 10-day average. They have gained 57 percent in value since the company reported fourth-quarter results in December.
The S&P 1500 Communications Equipment Sub-Industry Index .15GSPCOMM was down 2.19 percent.
(Reporting by Swati Chitnis and Fareha Khan in Bangalore; Editing by Maju Samuel, Sriraj Kalluvila)