December 12, 2013 / 1:15 PM / 6 years ago

UPDATE 2-Ciena revenue forecast muted as carriers temper spending

* Sees first-quarter revenue $515 mln-$545 mln vs est $537.7 mln

* Fourth-quarter adjusted earnings $0.16/share vs est $0.24

* Revenue $583.4 mln vs est $568.5 mln

* Shares down as much as 5 pct (Adds details, updates share movement)

Dec 12 (Reuters) - Network equipment maker Ciena Corp forecast current-quarter revenue largely below Wall Street estimates as its telecom customers held back on spending in the last few months of the year.

Ciena shares fell as much as 6 percent after the company also reported lower-than-expected fourth-quarter profit due to higher costs.

AT&T Inc, Ciena’s biggest source of revenue last year, and other customers such as Verizon Communications Inc have tempered spending on network upgrades to bolster free cash flow, analysts have said.

Typically, carriers boost spending towards the end of the year as they look to use up their remaining budget for the year.

Ciena and rivals such as Juniper Networks Inc, whose products expand capacity of fiber-optic networks, have benefited in the past year as major U.S. telecom companies upgrade their wireless and wireline networks.

Ciena forecast revenue of $515 million to $545 million for the first-quarter ending Jan. 31.

Analysts on average had expected revenue of $537.7 million, according to Thomson Reuters I/B/E/S.

Ciena said it expected its adjusted operating margin for the year ending October 2014 to be at the low end of its long-term target of 7-10 percent, up from 6 percent in fiscal 2013.

“We’re expecting a very strong 2014 from the major carriers in North America,” CEO Gary Smith said on a conference call.

Ciena also expects contract wins this year from large customers such as Vodafone Group Plc to result in strong orders in 2014.

Unlike rival Cisco Systems Inc, which stunned the market last month with a revenue warning, Ciena is not exposed to the Chinese market, where U.S. companies say they are facing a backlash following revelations of U.S. spying.

Ciena’s net loss narrowed to $9.8 million, or 9 cents per share in the fourth quarter ended Oct. 31, from $38.8 million, or 39 cents per share, a year earlier.

But excluding items, the company earned 16 cents per share.

Revenue rose 25 percent to $583.4 million.

Analysts on average had expected earnings of 24 cents on revenue of $568.5 million.

Nasdaq-listed Ciena also said on Thursday it would transfer its listing to the New York Stock Exchange, and would start trading on the NYSE from Dec. 23.

Ciena’s shares were down 4 percent at $21.97 in late morning trading on Thursday. (Writing by Sruthi Ramakrishnan and Neha Alawadhi in Bangalore; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty)

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