Ciena's 2nd-quarter net tumbles 46% However, profit rose 8.9% without one-time charges

May 22, 1998|By Mark Ribbing | Mark Ribbing,SUN STAFF

Telecommunications equipment maker Ciena Corp. yesterday reported net income of $15.3 million, or 14 cents per diluted share, for its second quarter, which ended May 2.

That figure was heavily skewed by one-time charges. Excluding the expenses of Ciena's $11.7 million acquisition of Terabit Technology Inc. and its continuing litigation with rival Pirelli SpA, the company's quarterly income was $31 million, or 29 cents per share.

Linthicum-based Ciena had net income of $28.5 million, or 27 cents per diluted share, for the same quarter last year.

Including the acquisition and litigation charges, Ciena's earnings were down 46 percent from last year's second quarter. Without the charges, its earnings would have risen 8.9 percent.

Ciena took in $142.7 million in revenue during the second quarter, a 46 percent increase over the $97.6 million the company posted in second-quarter revenue last year.

The company's earnings were released after the markets closed yesterday. Ciena shares rose 37.5 cents to $52.0625 on the Nasdaq stock market.

The quarter started badly for Ciena, which manufactures devices that expand the capacity of fiber-optic communications

channels. In February, the company's stock plunged when it announced that WorldCom Inc., a telephone and Internet firm that had accounted for about 45 percent of Ciena's revenue, was delaying orders.

During the rest of the quarter, however, Ciena was able to string together a series of new contracts and operating agreements that helped boost its bottom line. Ciena's latest earnings figures -- excluding special charges -- met or slightly exceeded analysts' expectations.

On March 16, the company announced a three-year agreement to provide equipment to Sprint Corp., a deal worth more than $100 million to Ciena in the first year alone. Another accord that figured into last quarter's earnings sheet was a $13 million supply deal with Digital Teleport Inc.

The extraordinary charges for the second quarter included $10 million in accrued expenses relating to Ciena's continuing patent infringement litigation against Pirelli. Ciena said yesterday that it has entered settlement talks with Pirelli and that the accrued expense reflects the expected costs if the matter proceeds to trial.

The remaining one-time costs on the second-quarter earnings report include outlays for research and development that were written off as a result of the Terabit acquisition, which was announced April 22.

Pub Date: 5/22/98

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