| Ciena Corp. |
1201 Winterson Rd.
Linthicum, Md. 21090
Year founded: 1992
Revenue: $283.14 Million
Net Income/Loss: ($386,517,000.00)
Earnings per share: ($0.87)
Stockholder equity: $1.33 Billion
Auditor: PricewaterhouseCoopers LLP
Assets: $2.38 Billion
Market capitalization: $2.37 Billion
52-week high: 8.14 1/16/2004
52-week low: 4.191 4/25/2003
Executive chairman: Patrick H. Nettles
President and CEO: Gary B. Smith
Local employees: 700
Description: Ciena makes equipment that lets fiber-optic networks push data along at faster speeds. The company revolutionized the telecommunications industry in 1996 with a technology that carries light signals across long distances. It still sells equipment using that technology but has also acquired or developed new technologies for local telecommunciations companies.
Developments: There are two approaches to the flat sales in the telecommunications equipment industry: Pare down and wait for a recovery, or buy new technologies to sell to more customers. Ciena opted to spend. Since the telecom industry's collapse nearly four years ago, Ciena continues to buy companies in the hopes of broadening its businesses. During the last two years it bought Catena Networks, Internet Photonics, ONI Systems, Akara and WaveSmith Networks. The acquisitions of Catena and Internet Photonics, for $640 million in stock, should close in the third quarter. Spending money in a downturn is a controversial strategy, and it has brought Ciena harsh criticism from some analysts who believe it has strayed too far from its original business. Ciena has cut expenses, too, and like many of its rivals has laid off thousands of people, dropping from a high of about 4,000 employees in 2001 to about 1,800 now. Ciena closed an R&D operation in California and laid off 425 people just last week. Chief executive Gary B. Smith insists companies have to spend and innovate to come out of a recession with a solid business. "If Ciena is going to thrive in today's telecom environment, we must get bigger, not smaller. We continue to believe that we cannot simply cost-cut our way back to sustainable profitability," he said after the purchase of Akara. Catena and Internet Photonics, for example, are Ciena's first forays into the digital-subscriber-line and cable-industry markets. Catena makes products that let phone companies roll out DSL Internet access to customers, while Internet Photonics provides network equipment for cable companies. The company has expanded to more than 100 customers, and through acquisitions it has bought its way into doing business with companies like SBC Communications Inc., Nielsen Media Research, Florida Power & Light, the U.S. Army and the state of New Jersey.
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