Ciena (CIEN) shares jumped 10% Thursday as the company cast itself as the outfitter to next-generation networks.
The Linthicum, Md., optical networking shop beat adjusted profit expectations for the fiscal fourth quarter, and in the process pulled the year out of the red.
Looking ahead, Ciena called for first-quarter earnings of about 12 cents a share on sequential revenue growth somewhere in the single digits, roughly in line with analysts' estimates. The company also reiterated its outlook for gross margins in the mid-40s percentagewise.
On a conference call with analysts, CEO Gary Smith was asked if he saw any reason to change his fiscal 2007 sales estimate of $686 million. He didn't.
"It's still a reasonable figure, not without its risks and not without its upsides," Smith said, repeating the same
conditional commitment he gave at an analyst briefing in October.
The return to profits marks a big milestone for Ciena, one of the few independent survivors of the telecom collapse earlier in the decade.
With a few key products and a solid customer roster, Ciena vowed to not hunker down and pinch pennies but
spend its way to success.
Through a hit-and-miss acquisition strategy, Ciena was able to add popular gear to its portfolio. While rivals like
( NT) stumbled badly during the downturn, Ciena found a promising niche helping telcos transition from old line phone systems to capacious Internet-friendly pathways.
"It's been a long journey retooling the company, and we have a lot of work still ahead of us," says CEO Smith.
But clearly it's not bad work, if you can get it.
Ciena has managed to find a way onto the networking blueprints for several large telcos and cable companies including
and closely held Cox.
"We've become specialists in that transition from voice to IP networks," says Smith.
This technology shift has another three or four years ahead of it, says Smith, adding that "when you have a lot of networking migration going on, that suits us."