Sales Progress Continues to Elude Ciena

And to help capitalize on those wins, Ciena has acquired companies such as ONI and WaveSmith to help broaden its metropolitan optical-gear and data product lineup.

During that same period, larger rivals like Lucent (LU Quote) and Nortel (NT Quote) have had to jettison many of their promising yet unprofitable product lines to stay afloat.

Fitness

Ciena's lack of profits has made it a hard stock for many investors to get comfortable with. But the company may start to answer critics by showing some fiscal fitness this time around.

Though Ciena has $1 billion in cash and has made few excuses for having a quarterly revenue breakeven levels running as much as three times higher than current sales, analysts expect the company will likely say that it has made progress on cost-cutting efforts.

While analysts expect gross margins to hover around 24% in the third quarter, anything closer to 30% will be seen as evidence that Ciena is getting a handle on its expenses.

To be sure, managing costs is a widely appreciated talent these days. But Ciena investors are slightly more eager to hear something about growth. Watch out if the message is disappointing.