Monday, November 3, 2008

Ciena, a Linthicum, Md.-based network equipment provider to businesses, last month lowered its earnings outlook for the year. In its third-quarter earnings report on Sept. 4, Ciena officials said that many of its biggest customers were delaying orders. Chief executive Gary B. Smith attributed the delays to customers' "guarded approach to capital expenditures given the uncertain macroeconomic environment."

"While we've seen no project or order cancellations, sales cycles are lengthening and some deployments are slowing," he said in a statement.

The company provides equipment for the biggest telecommunications service operators, including Sprint Nextel, Verizon and AT&T. With the three telecom firms set to launch faster high-speed wireless Internet networks, Ciena and other networking equipment makers were likely to benefit.

Comments by Smith, however, helped send the company's shares to a 52-week low of $6.60 in mid-October, 86 percent off its high of $48.82 last November.

Since then, however, shares of Ciena have lifted slightly, thanks to word from AT&T that it was moving forward on capital spending plans to support the build-out of high-speed wireless networks -- a move that directly affects equipment purchases from Ciena, analysts said.

Ciena has about $800 million of convertible debt, with its first payments of $300 million due in 2013. It also has about $1.1 billion in cash.