Ciena Falls Short Again

Sagging Ciena (CIEN) posted another quarterly shortfall Thursday.

For the second quarter ended April 30, Ciena lost $76.2 million, or 16 cents a share. That's roughly flat with the year-ago loss of $75.5 million, or 17 cents a share. Sales inched up 1.6% to $74.7 million.

On a pro forma basis, excluding certain costs and not in accordance with accounting rules, Ciena's latest-quarter loss was $44 million, or 9 cents a share. That's a penny shy of the Wall Street estimate. Analysts surveyed by Thomson First Call had forecast an 8-cent-a-share loss on sales of $79 million.

The company continued to put a brave face on its troubles. "The last quarter was important for Ciena as we took significant and deliberate steps in two key areas aimed at improving our business in both the immediate and longer term," said CEO Gary Smith. "First, with the acquisitions of Catena Networks and Internet Photonics, we have added products to help build Ciena into a leading provider of service-delivery solutions. Second, we initiated the next phase of strategic operating expense reductions that will improve our cost structure and shorten the path to our near-term goals of achieving cash flow breakeven and profitability."

Smith also forecast a 30% rise in third-quarter revenue from second-quarter levels. That would put Ciena's revenue at around $97 million. For the third quarter, Wall Street expects a 6-cent loss on sales of $93 million.

The news comes as the Linthicum, Md., telecom gearmaker searches for a way to reverse a long slide in its business. TheStreet.com reported Wednesday that Ciena would cut 300 jobs, or a quarter of its workforce, as sales continue to stagnate.

Recent setbacks indicate that Ciena continues to lack a hot product that big telco customers are eager to expend their scarce capital dollars on. The company's industry-leading optical switch, the CoreDirector, is losing traction as phone companies shift toward rival products from Sycamore (SCMR) and new equipment from Alcatel (ALA).