Ciena Corp. (NASDAQ: CIEN) reported revenue of $477.6 million for the second quarter of its fiscal 2012, ended April 30. And corporate management said they expect continued strength in the second half of the year.
Despite the strong revenue performance, the company still lost $27.8 million ($0.28 per common share) in the quarter on a GAAP basis. Still, Ciena’s performance showed marked improvement over the same quarter in 2011, when the company reported a GAAP net loss of $62.7 million ($0.66 per common share).
On a non-GAAP, basis, the company made $3.7 million ($0.04 per common share) during this year’s second quarter.
Gross margin declined sequentially during the quarter, to 38.3%, from 40.3% in 1Q12. The company blamed product mix and the delivery of new systems to new customers for the slippage.
Packet-optic transport system sales led the revenue charge, growing $51.7 million sequentially. Revenues from the CESD and services segments also rose sequentially. Together, these niches offset a sequential decline in sales of packet-optical switching systems such as the CoreDirector and the relatively new 5400 Reconfigurable Switching System.
As has become a common lament, CEO Gary Smith noted that economic turmoil in Europe continues to have an effect on equipment demand. However, he noted that the company has limited exposure to Southern Europe, where the region’s economic problems are most pronounced. He described demand from Ciena’s Northern European customers as “steady” during a conference call with analysts.
Smith and Senior Vice President, Finance and CFO James Moylan said they expect revenues for the current quarter, which ends July 31, to range between $455 million and $485 million. They also expressed confidence that the second half of the year will prove positive for the company, including for the currently lagging switching business. Smith says that the company has 19 customers (counting the 16-member SEA-ME-WE-4 consortium as a single customer) for the 5400 switching platforms, which the company unveiled in September 2009. As a point of comparison, Smith pointed out on the call that this number is already 50% that of the 12-year-old CoreDirector, the 5400’s predecessor.
[Correction] In addition to several Tier 1 customers among the SEA-ME-WE-4 consortium, Verizon has announced its plans to deploy the 5430 in its network (see “Verizon unveils new optical network strategy”) [Editor's Note: Lightwave had previously reported that Ciena had no Tier 1 deployments yet, which was an error.]
Ciena also has seen success with its WaveLogic processor-enabled coherent transport offerings. Vice President of Investor Relations Greg Lampf said that the company has 114 customers using its coherent technology. Interestingly, about 105 of them are using coherent technology to support 40-Gbps data rates. About 30 customers are transmitting 100-Gbps wavelengths. A number of customers are doing both, which explains why the total customer number is 114 and not 135.
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