Ciena's sales grow fourfold Hot firm nearly earns in last quarter what it gained all year

February 22, 1997|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Ciena Corp. marked its first quarter as a public company by saying its sales effectively quadrupled during the quarter that ended in January, when its sales were only 2 percent lower than during the whole year that ended in October.

The Savage-based telecommunications equipment company said it earned $13.1 million, or 13 cents a share, during the first quarter of its fiscal year on sales of $53.9 million. The company earned $14.7 million on $54.8 million of sales during all of fiscal 1996.

The company also said it hired more than 76 new workers during the quarter, most of them at Baltimore-area locations. The company, founded in 1992, has a staff of 301. "That changes every single Monday," said Joseph R. Chinnici, the chief financial officer.

The quarter comfortably exceeded expectations on Wall Street. Baltimore-based Alex. Brown Inc., one of the underwriters of Ciena's initial public offering Feb. 7, had been projecting the company would earn 9 cents a share on $45 million in sales, said Kevin Slocum, an analyst at Soundview Financial Group in Stamford, Conn.

"They just produced for the quarter what they had earned for their entire [previous] existence," said Kathleen Smith, portfolio manager at Renaissance Capital Corp. in Greenwich, Conn., a boutique firm that follows the market in initial public offerings. "That's pretty good."

Slocum agreed. "They did great," he said. "We have an awful technology tape today, and it managed to stay up."

Ciena shares rose $1.25 to $36.75 on a day when big tech stocks such as IBM and Intel got routed and the technology rich Nasdaq composite index fell 13.08.

Alex. Brown declined to comment on its estimate. Because the firm was an underwriter of Ciena's initial public offering, federal anti-stock manipulation law bars its analysts from making most public comments about Ciena until March 5.

Five-year old Ciena's initial public offering was the hottest so far this year, because its equipment helps long-distance phone companies carry 16 times as much traffic over existing fiber-optic cables. Its stock went public at $23 and rose $14 in its first trading day. Yesterday's closing price values Ciena at $3.4 billion.

The company's "dense wave division multiplexing" systems act like a prism, breaking down the light waves carrying fiber-optic -- traffic into smaller components that can move much more efficiently through the system.

Almost all of Ciena's sales have been to Sprint Corp. and WorldCom Inc., the nation's third and fifth-largest long-distance carriers. The company began selling its equipment only last year.

Pub Date: 2/22/97

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