Updated from Aug. 3
warned late Tuesday of a sharp sales shortfall as the telecom network spending market remains slow.
The Linthicum, Md., maker of optical networking gear forecast third-quarter sales of $75 million, which is $20 million short of the Wall Street analyst consensus estimate. The company said it would lose 7 or 8 cents a share on an operating basis during the quarter, which is in line with the Thomson First Call estimate, as a result of sharp cost-cutting. A year ago, the company lost 9 cents a share on that basis.
Counting all costs, Ciena expects to lose 25 cents a share.
Ciena cited slow industrywide spending, notably including a deceleration in digital subscriber line, or DSL, orders during the period. Big telcos such as
use DSL to provide customers with Internet access in competition with big cable companies.
The warning comes on the heels of a number of setbacks at Ciena, which once was a Wall Street favorite but recently has repeatedly come up short of its financial targets. Analysts say the company has failed to come up with a hot product to sell to penny-pinching telcos following the early success of its CoreDirector gear.
The stock slipped 20% to $2.22 in early Wednesday action.