Ciena Jumps After Revenue Forecast Exceeds Estimates as Economy Rebounds

Ciena Corp., the maker of network gear for the biggest U.S. phone companies, rose in Nasdaq trading after forecasting sales than topped analysts estimated as the economy improves.

Revenue will reach $375 million to $400 million in the quarter ending in July, the Linthicum, Maryland-based company said today in a statement. Analysts had predicted $332.8 million, the average of 14 estimates compiled by Bloomberg.

Chief Executive Officer Gary Smith, 49, said the company is starting to see signs of recovery in consumer spending, and wireless phone companies are beginning to update their networks to prepare for a wave of demand for data services, such as video calls. Ciena acquired an Ethernet business this year from Nortel Networks Corp. that will contribute its first full quarter of sales in the three months through July.

“Most networks are designed for terrestrial voice, not for video and advanced wireless applications, so existing infrastructure needs updating,” Smith said on a conference call. “As a result, we anticipate strategic spending.”

Ciena gained 11 cents to $13.95 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have advanced 29 percent this year.

The company makes fiber-optic network gear that phone carriers use to transmit video and other bandwidth-intensive traffic. Ciena is benefiting as consumers and businesses add mobile devices, download online applications and watch more video via the Web, Smith said today in an interview.

“We are at the beginning of the investment cycle as carriers transition to a high-capacity, scalable global network,” said Smith. “As far as we’re concerned, all traffic is good traffic -- and the more mobile devices that get out there, the better. I encourage my son to download as many applications as possible.”

(To access a replay of the company’s conference call, go to http://www.ciena.com/investors.)

To contact the reporter on this story: Amy Thomson in New York at athomson6@bloomberg.net.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.