We probably should have seen the strong earnings report from Ciena
The growth the communications-equipment provider saw wasn't all organic, however, as revenue from its acquisition of Nortel Network's Metro Ethernet Networks business injected six weeks worth of sales into the mix. Yet Ciena still saw a 14% sequential improvement in its pre-acquisition portfolio, which amounted to a 39% jump over last year's numbers, indicating that the telco spending boom was real and the mobile Internet is where the revolution is taking place.
Can you hear me now?
Timing is everything
And that works to Ciena's advantage, as AT&T accounted for 20% of its revenue last year -- which is where some of the risk comes in. In the latest quarter, Ciena's top two customers were responsible for 42% of all of its revenue, suggesting that when telco spending does get reined in -- it can't go on like this forever, after all -- Ciena will suffer from its customer concentration.
But the trends are heading in Ciena's favor right now, and CAPS member DeclanPhillips sees the integration of the Nortel MEN business into Ciena's fold as the key lever that lifts it to additional movement ahead.
Ciena is a great company that recently did a great job of purchasing, as well as integrating, Nortel into their corporate structure. With the combined technological sophistication, equipment, patents, and dark fiber added to the expert salesmanship and customer list of Nortel, Ciena is positioned extremely well for growth.
Where's a cop when you need one?
An investor interested in Ciena might also want to look at Cisco
I've already marked Ciena to outperform the broad market averages for the next year or so, based on seeing AT&T still heavily investing in its network. Why not drop a dime on the Ciena CAPS page and let us know whether the equipment maker's call will go through?