Ciena Blows Past Targets

The networking gearmaker has strong profit growth and gives a solid outlook for next year.
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(CIEN) - Get Report

blew past targets and offered tepid growth guidance for next year.

The Linthicum, Md. optical networking shop posted adjusted earnings of $50 million or 48 cents a share, doubling its year-ago pro forma profit performance. Analysts had expected adjusted earnings of 42 cents a share, according to Yahoo! Finance.

Sales for the quarter ended Oct. 31 were $216 million, up 5% from the $205 million in the prior quarter and 35% above the $160 million revenue level last year. Analysts were looking for sales of $211 million.

Looking ahead, Ciena chief Gary Smith said in a press release that: "We believe that Ciena's focus on targeted segments of growth markets will enable us to continue to grow faster than our overall market." On guidance, Smith said the company expects "to deliver up to 5% sequential revenue growth in our fiscal first quarter and 20% annual revenue growth in fiscal 2008."

Analysts were looking for 2% sequential fiscal first-quarter growth and 22% annual growth.

Ciena also appointed Jim Moylan as its CFO replacing Joe Chinnici who had announced his plans to leave the company earlier this year. Moylan was formerly the finance chief at Swett & Crawford, a wholesale insurance shop. Moylan will take over the books early next month after the company files its annual report.

Ciena also says it won a another piece of the supply contract with

British Telecom


, though it did not disclose the value of the deal. Investors and analysts have been watching for signs of when BT's big upgrade would start to juice Ciena's results.

Ciena shares rose 22 cents to $42.34 in premarket trading Thursday.