Ciena Sees Revenue Falling, Even With ONI - TheStreet

Ciena

(CIEN) - Get Report

received shareholder approval for its acquisition of

ONI Systems

(ONIS)

and promptly announced that the additional revenue it gets from the transaction probably won't be enough to prevent a sequential dip in third-quarter sales.

The news sent Ciena's stock down about 9% to $4 in premarket Instinet trading.

Depending on the timing and acceptance of current customer orders, Ciena said, the combined company's fiscal third-quarter revenue "could be down meaningfully from Ciena's stand-alone second quarter revenue" or $87.05 million. Before the acquisition, the optical network component maker had previously said only that its own revenue would fall sequentially in the third quarter.

The company also laid out a cost-reduction program that will include 235 job cuts in an effort to slash up to $65 million a year from its cost side.

"We continue to navigate an uncertain telecomm environment -- one in which service provider spending appears to have reached unsustainably low levels. In this environment our business remains volatile and unpredictable, and our fiscal third quarter revenues will depend heavily on the timing of customer orders and acceptance of products for which we already have orders."