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Ciena Posts Solid Q3 Revenues, Cautions on Q4 Outlook
Ciena reported revenue of $253.2 million for its fiscal third quarter ended July 31, 2008, representing a 5% sequential increase from fiscal second quarter 2008 revenue of $242.2 million, and an increase of 24% over the same period a year ago when Ciena reported revenue of $205 million. Ciena’s net income (GAAP) was $11.7 million, or $0.12 per diluted common share. This compares to fiscal second quarter GAAP net income of $23.8 million, or $0.23 per diluted common share, and a reported GAAP net income of $28.3 million, or $0.29 per diluted share, for the same period a year ago.
Ciena said non-U.S. customers drove 38% of revenue in the quarter. The was a GAAP gross margin of 49.6% with product gross margin of 52% and services gross margin of 34%.
Ciena also struck a cautious note for the current quarter.
“In addition to existing customer-specific challenges, we have recently begun to experience order delays from many of our Tier One service provider customers, which we attribute to their guarded approach to capital expenditures given the uncertain macroeconomic environment,” said Smith. “While we’ve seen no project or order cancellations, sales cycles are lengthening and some deployments are slowing. As a result, we now expect fiscal fourth quarter revenue in a range of $190 to $210 million.”
“While current economic conditions warrant a cautious near-term outlook, the fundamental drivers of our business – growing capacity demands and the transition to more efficient, more powerful, automated networks – remain sound. We are confident that our portfolio and value propositions are differentiated, positioning us to take advantage of what is predicted to be a longer-term investment cycle in the transition from SONET/SDH to Ethernet-based networks,” said Gary Smith, Ciena’s president and CEO. ...
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Alcatel-Lucent Names Camus as Chairman and Verwaayen as CEO
Alcatel-Lucent's Board of Directors has approved the appointment of Philippe Camus as the company's non-executive Chairman as of October 1st, 2008. Ben Verwaayen is appointed as the company's chief executive officer. Ben will also join the company's Board of Directors.
Philippe Camus has previously served as the Co-CEO at European Aeronautic Defense and Space Company (EADS) and managed a large, global business in the high-tech industry. He is Co-Managing Partner of Lagardère, an international media group, and a partner of Evercore Partners, a New York based investment and advisory firm.
Ben Verwaayen served as CEO of BT from February 2002 to June 1, 2008. He was formerly vice-chairman of the management board of Lucent Technologies in the US, which he joined in September 1997. Prior to that, he worked with KPN in the Netherlands for nine years as president and managing director of its telecom subsidiary, PTT telecom. Before that, Ben worked for ITT, a predecessor of Alcatel.
Ben Verwaayen's office will be in the company's headquarters in Paris.
Philippe Camus' pay package includes a yearly fixed compensation of EUR 200,000 and a 100,000 restricted shares grant in September 2008 (to be earned upon performance criteria).
Ben Verwaayen's pay package as Alcatel-Lucent Chief Executive Officer includes a yearly fixed compensation of EUR 1,200,000, a target annual bonus of 150% of fixed salary (payout can range between 0% to 200% of that target based on agreed performance yearly criteria), and a grant of 1,000,000 share options in the first quarter of 2009. Ben Verwaayen will receive an initial option grant of 250,000 shares in September 2008. Options will vest upon performance criteria. In addition, there is a 250,000 restricted shares grant in September 2008 (to be earned upon performance criteria)....
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Dasan Networks Buys Out NSN Share, Companies Sign OEM Deal
DASAN Networks, a leading network equipment supplier in Korea, will acquire all of Nokia Siemens Networks' shares in Dasan Networks which represent 56.13% of all the shares of the company. With the acquisition completed these Korean investors will hold 60.83% of the shares of the company. The remainder of the shares are held by various shareholders.
Dasan's product portfolio includes IP-DSLAMs, Ethernet switches and FTTx solutions.
The companies plan to continue close cooperation through an Original Equipment Manufacturer- and Original Design Manufacturer agreement. Dasan products will remain part of NSN's broadband access solution....
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BroadSoft Acquires GENBAND's M6 Communication App Server
BroadSoft has acquired GENBAND's M6 Communication Applications Server, formerly VocalData, product line and related customer base. Financial terms were not disclosed.
GENBAND is the leading supplier of IP gateways for a diverse set of service provider networks worldwide.
BroadSoft said its acquisition of the M6 product line will extend its market position in the VoIP applications market. The acquisition will also enable GENBAND to focus its efforts on further advancing their gateway product innovation.
The companies have also entered into an agreement to cooperate on Network Transformation projects, which will allow their customers to bundle core voice, data and web-based services across an IP network.
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China Netcom Reaches 23.4 Million Broadband Users
China Netcom reported 1H08 revenue of RMB 41,125 million, which included upfront connection fees of RMB 505 million. Excluding upfront connection fees, revenue was RMB 40,620 million, representing a decrease of 0.15% over the same period of last year (unless otherwise specified, all reported data hereafter exclude the effect of upfront connection fees). Net profit was RMB 5,877 million, up 11.9% year on year because of the change in corporate tax rate and gain on non-cash transactions. If the impact of non-cash transactions was excluded, the net profit would be RMB5,420 million, up 3.2% year on year.
Some highlights from the report:
- During the first half of the year, China Netcom integrated its resources for broadband services, ICT (information and communication technology), value-added service and advertising and media services in its push for transformation into a "broadband communications and multimedia services provider". The revenue generated from these businesses grew by 26.2% and accounted for 40.6% of total revenues, up 8.5 percentage points over the same period of last year.
- In the first half of 2008, China Netcom reported a decline in total capital expenditure of 10.7% year-on-year to RMB 7,527 million. In particular, investment in the businesses of fixed-line and PHS only accounted for 4.4% of the total, down 13.2 percentage points compared to the same period last year.
- As of June 30, 2008, broadband subscribers increased to 23,355,000. This represented a net growth of 3,587,000 when compared to the end of 2007.
- China Netcom'S share of the broadband market in its service areas was 90.4%, up 1.5 percentage points year-on-year.
- Revenue from broadband services was RMB 8,859 million, a year-on-year increase of 38.8%. Broadband services accounted for 21.8% of total revenues, up 6.1 percentage points over the same period of last year. ARPU was RMB 68.5. Revenue generated from broadband content and applications was RMB 1,270 million, up 69.1 % over the same period of last year, accounting for RMB 9.8 of broadband ARPU.
- In the first half of 2008, ICT revenue grew by 28.5% year-on-year to RMB 1,882 million, and accounted for 4.6% of total revenue.
During the first half of 2008, China Netcom's traditional fixed-line service faced major challenges. The company is losing local access subscribers, leading to a decline in revenue from the traditional business. As of June 30, 2008, it had 108,510,000 local access subscribers, 2,310,000 less than at the end of 2007. Of this number, fixed-line subscribers declined by 1,499,000while PHS subscribers declined by 811,000.
- To combat the continuous decline in subscribers of its fixed-line business and PHS, China Netcom's strategy for 2008 is to use high-quality and bundled services, reformed pricing mechanisms, and improved customer experience to promote customer loyalty and thus arrest the decline in subscribers. In May, 2008, the company launched a family gateway, which offers information services to "Family 1+" customers, combining simultaneous access to the internet through various PCs, wireless internet access, family video monitoring and IPTV services.
- By the end of the first half of 2008, there were 9,971,000 "Family 1+" subscribers. Penetration rate among broadband subscribers for the "Family 1+" service was 36%.
Looking forward, Chairman Zuo Xunsheng said, "In the second half of 2008, we will increase investment in our innovative businesses, and step up effort to develop the innovative businesses, including the broadband services. We will continue the transformation of the "Family 1+" service in order to meet the demand of the household subscribers for high-quality multimedia services during informatization and to enhance the value of the fixed-line network. Meanwhile, we believe that the Company's merger with China Unicom will support and strengthen execution of these strategies. The merger will enable the new company to give full play to the competitive advantages of both predecessor companies, and bring the synergy of the mobile and fixed-line networks into play. The new company is also expected to have access to a 3G license. These will enable the new company to have an edge and to be better positioned in the domestic telecommunications market. The merger will increase shareholder value of both companies."...
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