Ciena Corp. shares fall 10% to $15.625

MARYLAND WATCH

December 12, 1998

Shares of Ciena Corp., the top seller of equipment to boost phone-network capacity, fell 10 percent yesterday, one day after the company warned that price cuts might lead to losses for two quarters.

Ciena fell $1.75 to $15.625. The Linthicum-based company has lost more than 80 percent of its market value since July.

Once far ahead of rivals in selling products that improve phone networks, Ciena is losing business to Lucent Technologies Inc., Alcatel SA and Pirelli SpA, which are cutting prices to gain market share.

To compete, Ciena is reducing prices and spending more on marketing, which could result in losses for the current quarter and succeeding one.

"The outlook has worsened considerably," said Timothy Savageaux, an analyst at Volpe Brown Whelan & Co., who rates Ciena as "neutral."

Ciena traded as high as $92.375 in July, when the company was set to be sold to Tellabs Inc. for $7.1 billion. Tellabs called off the agreement in September, after Ciena shares plunged 70 percent because it warned of lower earnings and failed to get two contracts.

Pub Date: 12/12/98

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