Ciena Beats on Sales, but Guides Flat

Ciena narrows its losses and widens its margin on better-than-expected sales but guides flat for the current quarter.
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narrowed its losses and widened its margin on better-than-expected sales.

Shares of the networking gearmaker rose 6% in premarket trading Thursday as investors cheered the solid results. But the company tempered some of the enthusiasm by guiding for a flat sequential performance in the current quarter, due to continued cautious spending among its customers.

Excluding $17.8 million in one-time charges, Ciena posted a net loss of $4.8 million, or a nickel a share. That compares with an adjusted loss of $22.5 million or 25 cents a share in the prior quarter and a 37-cent pro forma profit in the year-ago period. Analysts had expected an adjusted loss of 13 cents a share, according to Yahoo! Finance.

Sale for the fiscal third quarter ended in July were $164.8 million, up 14% from the prior quarter but down 35% from last year's level. Analysts had expected Ciena's sales to drop 40% to $152.6 million in the most recent quarter.

Like other tech companies, including


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, Ciena has managed to balance the drooping revenue trend with cost cuts. This effort was evident in Ciena's gross margins, which expanded to 46% from 43% in the previous quarter.

Looking ahead, CEO Gary Smith says business should be calmer than it has been the past 12 months.

"Industry sentiment has improved somewhat over the first half of the calendar year as a result of what seems to be a stabilizing macro environment combined with continued pressure on service providers to increase network capacity and deliver more services," Smith said in a press release.

Ciena shares rose 79 cents, or 6%, to $13.06 in premarket trading Thursday.

Written by Scott Moritz in New York.