Ciena's (Nasdaq: CIEN) fiscal Q1 earnings got a boost from its acquisition of Nortel's Metro Ethernet Network (MEN) division, but that wasn't enough to offset wider losses and a second quarter outlook that fell below analyst's expectations.
Not surprisingly, this outlook drove Ciena's shares down 9 percent to $26.28 in Monday morning trading on the Nasdaq stock exchange.
Ciena's total Q4 revenue more than doubled to $433 million from $175.88 million in Q1 2010, surpassing analysts' $421.91 million forecast. On a sequential basis, revenues increase 4 percent from fiscal Q4 revenue of $417.6 million.
Two of its domestic U.S. customers, which are widely known to be AT&T (NYSE: T) and Verizon (NYSE: VZ), contributed 25 percent, or $108 million to Ciena's sales. International sales also continue to be strong. During the quarter, international sales accounted for 49 percent, or $213.3 million, of its first-quarter revenues.
But as much as the Nortel MEN revenue helped, back office integration issues prompted Ciena to forecast Q2 revenue of $415-$435 million. Analysts expected the company to report $438.5 million.
Ciena's Q4 net losses were $79.06 million or $0.84 per share, up from $53.33 million or $0.58 per share in Q1 2010. During the quarter, Ciena had to shell out $24.2 million to pay for acquisition and integration-related costs related to its Nortel MEN deal.
Gary Smith, Ciena's CEO said that "the effects of our back office integration activity, which--while extremely well-executed--resulted in some revenue acceleration into the first quarter and minor ERP-related supply chain constraints at the beginning of our second quarter."
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