Will Nortel bring down Ciena?

by Guest on December 11, 2009

ciena_sample Did Nokia Siemens know something that the rest of us didn’t know?  Is that why they let CIena win the Nortel Metro Ethernet Networks (MEN) auction with a bid that some analysts felt was too big for Ciena to manage?

Cut to today, and we find Ciena has posted a quarterly loss that was a tad bigger than they had predicted.  Increased sales offset with increased costs found Ciena posting a loss of $26.7 million, 5% higher than last years $25.4 million.  This announcement contributed in Ciena shares dropping 4.8% today, even though sales were up $8 million, the only problem is they were  $2.4 million less than the same period last year.

Investors are still concerned that Ciena won’t be able to capitalize on the Nortel acquisition, which doubled the size of the Baltimore based company.  Questioning what Ciena’s plan is after acquiring Nortel MEN for $769 million, industry analyst Blair King shares “The mystery is still what the earnings power is on a combined basis.”

So, is Nortel bringing Ciena down?  Will Nokia Siemens swoop in and buy up the still warm carcass of Ciena, including what remains of the Nortel MEN?  Looks like we’ll have to wait and see!

Written by: Jason Finnerty. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Identi.ca, or Friendfeed

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