This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Ciena Hopes Sales Growth Trumps Risk

NEW YORK ( TheStreet) -- An improving top line should take care of the bottom line, says Ciena (CIEN - Get Report) chief Gary Smith.

Ciena disappointed investors Thursday with a big miss on net losses. The whiff sent shares down 10% as the surprising losses compound concerns about Ciena's ability to manage expenses while integrating Nortel's optical networking business.

But Ciena deflected some of the biggest concerns by delivering solid sales for its fiscal fourth quarter. The firm also cited order growth as it predicted a 5% sequential revenue increase in its fiscal first quarter.

Still, clouds hang over the integration challenges facing Ciena and its pending $769 million cash and stock deal for Nortel assets acquired through a bankruptcy process. Ciena expects to close the deal by April.

The move would nearly double the size of the networking specialist. And though many of Nortel's customers are Ciena customers, there's no certainty that the pairing will revive slumping sales and restore profits.

"We've got our arms around it, and we've proven in the past we can do it," says Smith, referring to Ciena's ability to stem its losses while adding new businesses.

However, this time the challenge is considerably larger.

Some investors have been placing bets that Ciena's Nortel transformation won't be all sweetness and light. Short interest in Ciena -- the percentage of its shares being shorted or borrowed with the hope of returning them at a cheaper price -- was among the biggest of all the stocks in the S&P 500 last month, according to Bloomberg.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
CIEN $25.45 0.00%
AAPL $121.30 0.00%
FB $94.01 0.00%
GOOG $625.61 0.00%
TSLA $266.15 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs