view printer-friendly version

CIENA Reports Third Quarter Revenue of $233.3 Million, Net Income of $0.19 per Diluted Share

Technological and Market Leadership Confirmed as CIENA Announces Sales of Next-Generation, Intelligent Optical Core Switch, MultiWave CoreDirector

Ciena Corporation (CIEN) today reported revenue of $233.3 million for its third fiscal quarter ended July 31, 2000. The results represent sequential revenue growth of more than 25 percent over the Company's fiscal second quarter revenue of $185.7 million, and an increase of more than 80 percent as compared to the same period a year ago when the Company reported revenue of $128.8 million.

Net income for the third quarter was $28.2 million, or $0.19 per diluted share. This compares with net income for the previous quarter of $18.4 million, or $0.12 per diluted share. For the same period in fiscal 1999, the Company reported net income of $1.5 million, exclusive of one-time charges, or $0.01 per diluted share. Consensus of First Call estimates for third quarter fiscal 2000 earnings per share was $0.17 per diluted share.

"Ciena's strong sequential growth is the result of a combination of high demand for our industry-leading optical networking products and successful achievement of new levels of manufacturing and operational efficiencies," said Patrick Nettles, Ciena president and chief executive officer.

For the nine months ended July 31, 2000, Ciena reported revenue of $571.2 million, an increase of approximately 68 percent over revenue of $340.7 million for the first nine months of 1999. For the first nine months of 2000, net income totaled $55.6 million, or $0.37 per diluted share. This compares with net income of $0.1 million, exclusive of one-time charges, or breakeven, or $0.00 earnings per diluted share for the same period in 1999.¹

Ciena continues to demonstrate its technological and market leadership, becoming the first in the industry to announce sales of a next-generation, intelligent, optical core switch, its MultiWave CoreDirector™. As of the end of its third fiscal quarter, Ciena had recognized revenues from three customers who had accepted MultiWave CoreDirector for deployment. Ciena also disclosed that in addition to those from which it already has taken revenue, seven service providers currently are trialing CoreDirector. With its scalability, flexibility, and advanced networking capabilities, CoreDirector is designed to enable carriers to dramatically reduce the cost of deploying, operating, and scaling optical service networks.

During its fiscal third quarter, Ciena also became the first optical networking equipment vendor to announce the deployment of 10 gigabit per second transmission capability in a metropolitan network application. Ciena's MultiWave Metro™ offers features that simplify metropolitan network designs, and is designed to drive down the cost-per-bit in local networks and provide the foundation for simpler, smarter optical networks that offer service providers substantial operational and economic advantages.

Commenting on Ciena's business outlook, CEO Nettles said, "Demand across our product lines is strong. In addition to contributions from new products like CoreDirector, we expect continued robust sales of our long-distance optical transport products, MultiWave CoreStream™ and MultiWave Sentry™, and our metropolitan optical transport product, MultiWave Metro."

"Short-term, we expect our greatest challenges will be the continued scaling of our manufacturing and sales efforts and effectively managing the business in the face of rapid growth," said Nettles. "Based on information available to us today, we believe we'll be able to outperform current consensus expectations for net income and earnings per share for our fourth fiscal quarter."

"With service providers' capital expenditures and operational costs continuing to outpace revenue and profit growth, there are more compelling reasons than ever before for carriers to move rapidly to deploy flexible, efficient optical networks," concluded Nettles. "New optical service networks that leverage the power of intelligent optical networking will enable carriers to lower capital expenses, reduce operational costs and deliver new, revenue-generating, high-bandwidth optical services. Ciena believes that it is the first vendor to provide all of the optical systems required to build the next-generation Optical Service Network - from optical transport, to optical switching, to service-level network management."

¹ Past financial results have been restated to reflect the consolidated operating results of Lightera Networks, Inc. and Omnia Communications, Inc., acquired by Ciena in pooling transactions on March 31, 1999 and July 1, 1999, respectively. Net income and earnings per share amounts in the attached consolidated statement of operations are inclusive of the effects of merger-related and other one-time charges. All earnings per share amounts represent diluted earnings per share as defined within Statement of Financial Accounting Standards No. 128 (SFAS 128).

Ciena CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)