Ciena finishes fiscal 2011 with a bang

Ciena Corp. (NASDAQ: CIEN) ended an up-and-down fiscal 2011 on the up side in terms of revenue, reporting $455.5 million for the fiscal fourth quarter that ended October 31. The figure marked a revenue increase of $37.9 million over the year-ago quarter and $20.2 million sequentially.

Ciena Corp. (NASDAQ: CIEN) ended an up-and-down fiscal 2011 on the up side in terms of revenue, reporting $455.5 million for the fiscal fourth quarter that ended October 31. The figure marked a revenue increase of $37.9 million over the year-ago quarter and $20.2 million sequentially. Ciena President and CEO Gary Smith told analysts on a call yesterday morning that the quarter saw a record number of orders.

For the year, revenue also improved. Ciena reported revenues of $1.7 billion for fiscal 2011 up from $1.2 billion for fiscal year 2010.

However, on a GAAP basis, neither the quarter nor the year finished profitably. The company lost $22 million for the quarter ($0.23 per common share) and $195.5 million ($2.04 per common share) for the year in GAAP terms. These losses marked improvements over Ciena’s fiscal 2010 quarterly and annual performance; the company lost $80.3 million ($0.86 per common share) in 4Q10 and $333.5 million ($3.58 per common share) for the full fiscal year 12 months ago.

Gross margin came in at 41.7%, down 0.8% from the previous quarter but up 1.4% year on year.

Non-GAAP figures looked much better, or course. Ciena reported a non-GAAP profit of $3.3 million ($0.03 per common share) in the quarter and a non-GAAP loss of $24.2 million ($0.25 per common share) for the full fiscal year.

The company’s packet-optical transport gear led the resurgence, accounting for 65.1% of revenues for the quarter at $296.2 million, up from 61.3% ($266.5 million) in the previous quarter. The packet-optical switching and software and services segments also rose slightly quarter on quarter, while the Carrier Ethernet business declined by almost $12 million.

As a result, the company achieved $42 million positive cash flow from operations and approximately $30 million in free cash flow during the quarter, which Smith termed a “significant milestone.”

With fiscal 2011 behind him, Smith laid out his agenda for growth in the coming year. Elements include:

  • Expanding its global customer base, particularly in Brazil, the Middle East, Russia, Japan and India
  • Diversifying that customer base through support of such network applications as infrastructure for cloud-based services and Internet content providers
  • Increase business in such areas as submarine, mobile backhaul, and business Ethernet service applications.

Looking ahead, the momentum gained in the fiscal fourth quarter won’t carry over into the start of fiscal 2012, CFO James E. Moylan predicted. Citing traditional seasonal slowdowns, he called for revenue in the upcoming quarter to range from $435 to $455 million. However, Smith said he remains bullish on the company’s growth prospects for the coming year overall, particularly in its second half.

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