Ciena surpasses expectations as Q1 revenue rises to $453.1 million

Ciena (Nasdaq: CIEN) reported on Thursday that its fiscal Q1 2013 revenues rose 9 percent to $453.1 million and an adjusted profit per share of 12 cents, exceeding analyst expectations of a 14-cent loss.

The vendor reported a net loss of $47.3 million, or 47 cents per common share, slightly lower than the GAAP net loss of $47.7 million, or 49 cents per common share, it reported in fiscal Q1 2012.

On a product segment basis, Ciena's results were a mixed bag.

While Converged Packet Optical and Software and Services revenues rose year-over-year to $240 and $109.7 million, Packet Networking and Optical Transport revenues declined to $45.8 and $57.6 million, respectively.

One of the company's best-performing products in its portfolio was the 6500 platform, with $206 million in revenues.

Customers have been adopting the 6500 platform to fulfill two needs: migrating to 100G and Optical Transport Network (OTN) and packet integration.

"Beyond Tier 1s, our 100-Gig customer base now spans every type of network operator, including content providers, federal and regional governments and major enterprises," said James Moylan, CFO and SVP of Finance for Ciena, during the earnings call. "We're also seeing OTN and packet integration become increasingly important, as the adoption of integrated switching on our 6500 platform is ramping nicely, with recent wins at PTTs in both Europe and Asia."

During the quarter, Ciena signed a number of contracts with large Tier 1 service providers, including Comcast (Nasdaq: CMCSA), Reliance Globalcom, Tata (NYSE: TCL), and XO Communications.

Following what was a flat year in optical spending, a recent Optical Network Hardware report from Infonetics forecast that there will be an uptick in optical spending in 2013 driven by ongoing migrations to 100G.

Ciena is seeing the growing demand for its Ethernet equipment, particularly in North America.

"Several of our major North American customers are ramping up the rollout of their business Ethernet offerings to meet this growing demand, particularly for ultra-high-speed services, and we continue to see momentum in Mobile Backhaul," said Moylan.

The vendor also said non-U.S. customers contributed 42 percent of total revenue and two customers accounted for more than 10 percent of revenue and represented 26.4 percent of its total revenue.

In CALA and APAC, Gary Smith, president and CEO of Ciena, said the company continues "to see strong growth, albeit from a smaller revenue base." CALA growth was driven by a number of wins with service providers such as Telefonica's Brazil-based subsidiary Vivo, for example, and the company is winning various PTT and submarine cable contracts in APAC.  

Given the economic uncertainty in Europe, Smith said that while it is "starting to see increasing activity and opportunities, we are not yet anticipating that there will be significant improvements in this fiscal year."

Looking towards the rest of the year, Ciena has forecast fiscal second quarter 2013 revenues in the range of $465 to $495 million.

Shares of Ciena were listed on the Nasdaq stock exchange $17.76, up 23 cents, or 1.31 percent, in pre-market trading on Friday.

For more:
- see the earnings release

Earnings roundup: Wireline telecom earnings in the fourth quarter of 2012

Special report: The 10 hottest wireline technologies in 2013

Related articles:
Comcast gets into the 100G optical game
Ciena's fiscal Q4 takes hit from decline in packet optical spending
Huawei, Ciena, Alcatel-Lucent take charge of the WDM market

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