Today looks like a great time to buy optical networking expert CIENA
The stock is down more than 11% after last night's fourth-quarter report, and I think it's for all the wrong reasons. Ciena beat its own revenue forecast soundly with a 7% sequential increase to $176 million. One large customer, probably AT&T
The bottom line did look thin with an adjusted loss of $0.12 per share, worse than the quarter before or the year-ago period, and $0.05 worse than analyst expectations. You had to tune into the analyst call to get a picture of that shortfall. Operating expenses ballooned partly because the sales were so strong: Ciena's sales staff collects commissions. Building prototypes for an upcoming product launch added to the operating costs as well. None of this sounds like a long-term disaster, and should be quite forgivable.
So the real reason Ciena is dropping like it's hot today is probably a lack of guidance on the acquisition of Nortel'soptical and long-distance networking division. When that deal closes early next year, Ciena will more than double in size -- whether you count by revenues or by employees. Due to a bidding war between Ciena and Nokia Siemens -- the joint networking venture of Nokia
That sends us back to the conference call, where CEO Gary Smith noted that Ciena has been talking to Nortel about how to mesh the two companies together for more than a year now. Customers like AT&T and Verizon
I'm not saying that Ciena is about to leapfrog Alcatel-Lucent
Whether you agree or disagree, we can discuss the matter in the comments below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Nokia is a Motley Fool Inside Value recommendation. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.