Ciena Stumbles Again on Spending Slump

Ciena's (CIEN Quote) second-quarter performance got crushed by the continued slump in tech spending.

The news adds to the ongoing struggles among big tech suppliers like Cisco (CSCO Quote), Alcatel-Lucent (ALU Quote) and Juniper (JNPR Quote) -- outfits that sell to penny-pinching telcos like AT&T (T Quote) and Verizon (VZ Quote).

"Our fiscal second quarter was particularly challenging, reflecting the difficult macro and industry environment and continued delays in customer spending," CEO Gary Smith said in a press release.

Shares of the Linthicum, Md.-based networking gearmaker fell 9% in premarket trading after the company posted its disappointing numbers Thursday.

Ciena delivered an adjusted net loss of $22.5 million or 25 cents a share for the quarter ended April 30. Those numbers compare with a 27-cent loss in the January quarter and a pro forma profit of 23 cents a year ago. Analysts were looking for a 9-cent loss, according to Yahoo! Finance.

Sales for the quarter were $144.2 million, down from $167.4 million in the prior quarter, and well below the $242 million level in the year-ago period.

Not included in the pro forma loss tally was a $455.7 million goodwill impairment charge as Ciena wrote off all the excess asset valuations on its books. With that charge included, Ciena's net loss was $503.2 million, or $5.53 a share.

Looking ahead, Ciena says it predicts "improved order flow" and expects to have an unspecified sequential sales growth in the fiscal third quarter. If true, the gains would reverse the painful downward revenue trend of the past year.