Uncertainty Clouds Ciena's Second Quarter - TheStreet

Uncertainty Clouds Ciena's Second Quarter

For the second quarter, Wall Street is expecting earnings losses for communications networking firm Ciena.
Publish date:

NEW YORK (TheStreet) -- For the second quarter, Wall Street is expecting an earnings loss for communications networking firm Ciena (CIEN) - Get Report, as the complexities of integrating the optical and carrier Ethernet assets of Nortel's metro Ethernet networks business weighs on investors' minds.

"The earnings frankly will be messy," Stifel Nicolaus analyst Sanjiv Wadhwani explained. "No one is willing to bet one way or another because of purchase accounting issues related to Nortel."

>>Search for Highest Dividends by Rate or Yield

For the second quarter, equity analysts are, on average, expecting the reported loss of 27 cents a share for the second quarter, compared with Ciena's year-ago net loss of 25 cents a share. Meanwhile, Ciena's revenue is expected to come in at $268.31 million, compared with reported revenue of $144.2 million the previous year.

The company is expected to face some short-term revenue challenges as it works in its new metro Ethernet networks assets, and has refrained from providing guidance about its near-term prospects.

Still, in the long-term, Ciena's sales opportunities are expected to be meaningful because of the acquisition. The combined company appears on track on honing its product portfolio, Wadhwani noted.

Ciena announced the completion of its $773.8 million cash purchase of the optical and carrier Ethernet assets in March has doubled the company's size because of the buy.



(CSCO) - Get Report

continues to up the ante on its direct competition with Ciena by announcing a deal of its own: in May it said it would pay about $99 million in cash and retention-based incentives in exchange for all shares of high-speed optical networking services firm CoreOptics.

Ciena reports its second quarter results on Wednesday, before the market open. Shares of Ciena are down 2.5% to $13.60 in Tuesday trading; Cisco shares are down 0.5% to $22.65.

-- Reported by Andrea Tse in New York

Follow TheStreet.com on


and become a fan on


Copyright 2010 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.