Ciena shows some telecom hope

Posted Sep 3rd 2009 5:30PM by Tom Taulli
Filed under: Earnings Reports, Ciena Corp (CIEN)

Just a couple years ago, the shares of Ciena Corp. (NASDAQ: CIEN) were above $40. But since then, it's been brutal -- with the shares eventually falling to $5.35. After all, the company is in the competitive telecom-equipment space.

However, things have been getting better lately. In fact, the share price is now at $13.06.

And this week Ciena reported its fiscal Q3 earnings report. While revenues dropped 35% over the past year, they were actually up 14% over the prior quarter. There was a net loss of $26.5 million, or $0.29 per share.

To deal with the problems in the telecom industry, Ciena has been cutting back on costs -- and it seems to be making a difference.

Yet, these are short-term fixes. Instead: it appears that the telecom industry is about to perk-up. No doubt, with the surge in the use of online video and smartphones, the demand for telecom equipment should grow. And, assuming the recession is abating, then the timing may be right for a turnaround.

So far in today's trading, the shares of Ciena are up 6.4%.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: ciena, earnings, inthenews, online video, OnlineVideo, smartphones, Telecom