Optical networking company Ciena Corp. on Thursday posted a quarterly net loss of $1.8 billion, mainly on a charge to write down assets, and warned of future operating losses due to the uncertain telecommunications market.

The Linthicum, Maryland-based company said the loss for the its fiscal fourth quarter ended Oct. 31 was $5.51 a share, compared with a year-earlier profit of $25.76 million, or 9 cents a share.

However, higher spending on research and development and a $1.7 billion charge, which was announced in November, pushed the company into the red even as sales rose 27 percent to $367.8 million.

In pre-market trading, Ciena shares fell $1.47 to $16.50 from Wednesday's regular Nasdaq close of $17.97.

``Given the difficult telecom environment, we are very pleased with Ciena's performance in 2001,'' President and Chief Executive Gary Smith said in a statement.

``The telecom industry is facing a dynamic and challenging market environment, the uncertainty of which has only been accentuated by the larger, overall economic slowdown,'' he added.

Smith said given market uncertainty and the unpredictability of quarterly revenues, the investment strategy for the maker of equipment that increases the capacity of fiber-optic telecommunications networks means it will incur operating losses.

Ciena said fourth-quarter operating earnings, excluding unusual charges, were $17.1 million, or 5 cents a diluted share, compared with $41.9 million, or 14 cents a diluted share, in the same period last year.

The operating results were lower as doubled its research and development spending and expanded its sales force even as rivals have retrenched amid the slowdown.

Analysts' consensus earnings estimate was 5 cents a share, with estimates ranging from 4 cents to 6 cents, according to market research firm Thomson Financial/First Call.

Ciena said in November that fourth-quarter earnings, excluding unusual charges, would be in line with Wall Street estimates.

It also announced plans last month to cut 380 jobs, or 10 percent of its work force, and take a fourth-quarter charge of about $1.7 billion to write down certain assets.

Ciena's shares have fallen about 78 percent so far this year. Since the start of the year, Ciena's stock has underperformed its peers in the American Stock Exchange Networking Index by about 49 percent.


Telecommunications companies and other communications firms have slashed their capital spending plans amid the slowdown, forcing suppliers to lay off workers. In addition to Ciena, other networkers that have cut jobs include Cisco Systems Inc., Nortel Networks Corp., Tellabs Inc. and Redback Networks Inc.

Ciena said last month it expected fourth-quarter revenues to rise about 27 percent to $367.8 million, but failed to provide Wall Street any guidance for 2002. Analysts responded by cutting their consensus 2002 estimate to 34 cents a share from 99 cents in August, according to First Call.

The company said in August it expected to earn 59 cents to 64 cents a share in 2001 and similar results in 2002. It also said 2001 revenues would grow 85 percent to 90 percent from the previous year, and 2002 revenues would increase in the low teens.

Ciena also said last month in addition to the $1.7 billion goodwill charge -- mostly related to its purchase of Cyras Systems -- that it would take a fourth-quarter restructuring charge of $15 million to $16 million.