This Day On The Street
Continue to site
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

JPMorgan Tech Conference: Ciena Puts On a Happy Face for Investors

SAN FRANCISCO -- Ciena (CIEN - Get Report) is not prepared to wipe that smile off its face. The optical network equipment maker stayed away from offering happy numbers at the JPMorgan H&Q conference, but its mood was relentlessly upbeat.

President and COO Gary Smith acknowledged there is a major pullback in carrier spending, of course. He threw up a few slides on the out-of-control capital equipment spending habits that had equipment sellers giddy over the past several years. The upward trajectory of spending was underlined by a slow, flat line of revenues -- a widening gap that had to be reconciled now that the capital markets are scowling at grabbing hands. "It has to come down if they're going to be profitable, if they're going to get well again," Smith says.

But Ciena's growing revenue line? No change there. Smith is perky as can be. Ciena hasn't been hit by the sadness drowning the spirits of Cisco (CSCO - Get Report) and Nortel (NT). The Ciena attitude has been unflaggingly positive, because those carriers can't buy everything, and the company believes they'll buy Ciena. If you can only spend so much, spend on future, next-generation systems, right?

Investors poked and prodded the company, but Smith wouldn't flinch. Is this a buyer's market now that Ciena's competitors need all the business they can get? Not if you've got better products that can't be replaced by reduced-price products of your competitors. "We've seen competitive pricing our there for the past two to three years," he says, adding that at times competitors were willing to almost give product away to get rid of Ciena.

Still smiling.

What about Cisco's inventory write-off? Surely that'll pressure Ciena as Cisco dumps products into the market. Nope, Smith says Cisco's lines that compete with Ciena are doing just fine, so they don't need to cut prices. How about the spread of economic gloom? Ciena draws 30% to 40% of its revenue from international business, but is just as pleased with those businesses -- no slowdown there either, or so it seems. And on the brighter side, Ciena says it's definitely seeing relief in the components it buys. Smith says he's got more flexibility in lead times and that pricing is more flexible.

What's not to like?

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
CSCO $25.11 0.00%
CIEN $18.28 0.00%
AAPL $93.99 0.00%
FB $102.01 0.00%
GOOG $682.40 0.00%


Chart of I:DJI
DOW 15,973.84 +313.66 2.00%
S&P 500 1,864.78 +35.70 1.95%
NASDAQ 4,337.5120 +70.6750 1.66%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs