Ciena Buy Strategy Paying Off

Ciena's (CIEN Quote) chief says the bold strategy of buying companies during the telecom downturn is starting to pay off.

The Linthicum, Md., networking-gear maker gave investors a pleasant surprise Thursday by posting solid revenue gains and raising its sequential sales-growth guidance to 5% in the current quarter.

Ciena is still burning through loads of cash -- about $50 million in the most recent quarter -- and has no profits in sight. But Ciena CEO Gary Smith said in an interview Thursday that the company is starting to benefit from a broader product range and shifting trends in communications technology.

It seems that higher volumes of Internet use and phone calling plus the confluence of different traffic types on common pathways are pushing telcos to buy new gear that can better merge and manage networks. ...