LINTHICUM, Md. – Optical networking company Ciena Corp. on Thursday posted a record quarterly operating loss because of the spending slowdown in the telecommunications industry and warned results in the current quarter will lag expectations due to further reductions in orders.
The company said two of its most important customers, which it did not identify, may purchase "significantly less" than previously indicated. As a result, it now expects second-quarter revenues to be about $100 million, below the $148.5 million analysts were expecting, according to Thomson Financial/First Call.
"There continues to be a high level of uncertainty surrounding service providers' near-term spending," Ciena President and Chief Executive Gary Smith said in a statement. "We continue to receive indications of further deployment delays."
The company did not provide a forecast beyond the second quarter.
Ciena shares were down 60 cents, or 6.9 percent, at $8.10 in early Nasdaq trade.
Ciena, like such telecom suppliers as Lucent Technologies Inc. and Nortel Networks Corp. , has been hit hard by the spending slowdown, including at major customers Qwest Communications International Inc. and Sprint Corp. .
Ciena reported an operating loss of $56.7 million, or 17 cents a diluted share, excluding one-time items, for the first quarter ended Jan. 31, compared with a year-earlier profit of $54.7 million, or 19 cents a basic share. The year-ago per-share results on a diluted basis were 18 cents.
The loss, which excludes such items as restructuring costs, amortization of intangibles and losses on equity investments, was slightly narrower than the company had forecast because of lower than expected operating expenses.
Ciena had warned earlier this month that cutbacks and delays in spending by major customers would result in a wider than expected first-quarter loss of 19 cents to 22 cents a share on revenues of about $160 million.
Analysts widened their average loss estimate to 20 cents a share from 11 cents, according to First Call.
Ciena's largest previous loss before items was $7.1 million in the fourth quarter of fiscal 1998. It posted a net loss of $1.8 billion in the fourth quarter of fiscal 2001.
The first-quarter net loss was $70.6 million, or 22 cents a diluted share, compared with a year-earlier net profit of $53.25 million, or 18 cents a share.
First-quarter revenues dropped by more than 50 percent to $162.2 million from about $352 million a year earlier.
Ciena said on Monday it plans to buy optical networking firm ONI Systems Corp. for $900 million in stock to bolster its presence in metropolitan networking markets. The deal, expected to close in the second or third quarter, would not dilute Ciena's earnings in fiscal 2002 and would add to them in 2003, the company said.