Summary
1. Ciena rightly points out that the two major RBOCs are not cancelling orders. 2. However, actual deliveries have slowed down to a crawl. 3. While this space will improve in the second half of this year for Ciena, there will not be anything resembling a buying spree for the manufacturer.
Analysis
While it is anticipated that Verizon will have a strong second half on CAPEX, it will probably only have a limited impact on Ciena’s sales. The RBOC will be concentrating its efforts on FiOS and LTE. Verizon continues to have the philosophy that at some point in the future, the economy will improve, and so it wants to be ready when that occurs.
Ciena’s revenues for its current fiscal quarter will probably be noticeably down from the previous one. There may be a slight increase in its next quarter. And for the one after that, the rate of growth will continue to go up, but only in a small way. From June through the rest of the calendar year, there could be an uptick for Ciena from AT&T.
While Ciena’s shipments to British Telecom have been down significantly, the supplier had apparently thought earlier that it would be worse.
