Ciena sees better 2013 as telecom carriers upgrade networks

Thu Dec 13, 2012 12:26pm EST
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By Chandni Doulatramani

(Reuters) - Network equipment maker Ciena Corp said its operating performance would improve in 2013 as telecom carriers boost spending to upgrade their networks after months of sluggish growth, sending its shares up as much as 5.5 percent.

Telecom carriers are rolling out their 4G LTE networks and are looking at optical equipment providers like Ciena who provide a key component to manage costs and modernize networks.

AT&T Inc, which accounted for about 15.5 percent of Ciena's fiscal 2011 revenue, said last month it will boost capital spending by about 16 percent to $22 billion a year for the next three years to upgrade its wireless and wireline networks.

Ciena's backlog rose 25 percent to $900 million at the end of the fiscal year, Chief Financial Officer Jim Moylan said on a conference call with analysts on Thursday.

Ciena's shares were up 1.9 percent at $15.87 on the Nasdaq in afternoon trading.

Investors could be positive about operating expenses going up in 2013, indicating higher demand, Mizuho Securities analyst Joanna Makris said.

The company said operating expense would be higher in 2013 as it would hire more sales staff and raise employee compensation.

Ciena said it expects first-quarter revenue of between $435 million and $460 million. Analysts were expecting revenue of $458.6 million, according to Thomson Reuters I/B/E/S.   Continued...