Shares of Ciena Corp. (CIEN: Quote) plunged over 17 percent on Thursday after it posted a higher-than-expected third-quarter loss and forecast a weak revenue outlook for the fourth quarter.
Chief Executive Gary Smith said, "We are experiencing the effects of ongoing macroeconomic challenges and slower than expected roll-outs of new design wins."
The slow growth in US economy and the continued weakness in Europe has made a deep impact on all network equipment maker's bottom line. Ciena, which counts AT&T Inc. (T) and Verizon Communications Inc. (VZ) among its top customers, was affected by these wireless carriers delaying orders for new equipments and curbing capital expenditures.
Linthicum, Maryland-based Ciena's third-quarter net loss narrowed down to $29.8 million or $0.30 per share from $31.5 million or $0.33 per share last year.
However, excluding special gains and losses, net loss was $4.1 million or $0.04 per share, compared to net income of $8.3 million or $0.08 per share last year. On average, 22 analysts polled by Thomson Reuters expected loss of $0.02 per share. Analysts' estimates typically exclude one-time items.
Revenues for the quarter grew to $474.1 million from $435.31 million last year. Analysts on a consensus estimated revenues of $473.88 million for the quarter. The company said its non-U.S. customers contributed 50 percent of total revenue.
Product revenues increased to $373.4 million from $350.0 million in the prior year. Services revenues were $100.7 million, higher than $85.3 million a year earlier.
Third-quarter gross margins, or percentage of sales left after subtracting production costs, dropped to 38.2 percent from 42.5 percent last year.
Moving ahead, the networking gear maker expects fourth-quarter revenues of $455 million to $480 million. However, it is below analysts' current estimate of $499.49 million.
CIEN is currently trading on the Nasdaq at $13.77, down $2.95 or 17.64%, on a volume of 20.2 million shares, above the three-month average volume of 6 million.
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by RTT Staff Writer
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