Ciena slips to loss after acquisition costs

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Ciena slips to loss after acquisition costs

Alex Scroxton
Ethernet networking specialist Ciena has slipped to a quarterly loss of $53.3m (£35.3m) after booking a major $27m expense relating to its acquisition of Nortel's optical networking and carrier Ethernet assets.

Sales at the Maryland-based vendor rose 5% year-on-year to $175.9m., with $46.4m of sales coming from outside its domestic market.

Besides the impact of the ongoing Nortel acquisition, "revenue recognition delays associated with initial deployments of new platforms with certain customers" had a negative impact on sales for the three months to 31 January, said CEO and president Gary Smith.

"However, with strong order flow in the quarter we remain encouraged by continued signs of an improving market environment," he added.

Ciena is now targeting sales of approximately $190m to the end of April.

Updating the market on the Nortel purchase, Smith said that planning activities were proceeding on schedule for anticipated closure before the end of March.

"Our ongoing customer interactions indicate strong validation of the value of the combined company," he said.

Nortel's MEN unit generated sales of $798m during the first nine months of Nortel's fiscal 2009, and is expected to be a massive boost to Ciena's coffers.

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