10-KPeriod: FY2013

CIENA CORP Annual Report, Year Ended Oct 31, 2013

Filed December 20, 2013For Securities:CIEN

Summary

Ciena Corporation (CIEN) reported a significant revenue increase of 13.6% to $2.08 billion for fiscal year 2013, up from $1.83 billion in fiscal year 2012. This growth was primarily driven by strong performance in the Converged Packet Optical segment, which saw a 24.8% revenue increase, indicating a market shift towards next-generation network architectures. The company also experienced growth in its Packet Networking and Software and Services segments, while its Optical Transport segment saw a decline, reflecting industry trends. Despite the revenue growth, Ciena reported a net loss of $85.4 million for fiscal year 2013, an improvement from the $144.0 million net loss in fiscal year 2012. The company's cash position decreased significantly, largely due to debt repayment. Key risks highlighted include intense competition, customer concentration (with AT&T alone accounting for 17.9% of revenue), and reliance on third-party suppliers.

Financial Highlights

28 data points
Beta

Revenue

$2.08B

41.5% Gross Margin

Net Income

-$85.43M

-4.1% Net Margin

EPS (Diluted)

$-0.83

Free Cash Flow

$864K

Financial Statements
Beta
Revenue$2.08B
Cost of Revenue$1.22B
Gross Profit$865.17M
R&D Expenses$383.41M
Operating Expenses$866.95M
Operating Income-$1.77M
Interest Expense$44.04M
Net Income-$85.43M
EPS (Basic)$-0.83
EPS (Diluted)$-0.83
Shares Outstanding (Basic)102.35M
Shares Outstanding (Diluted)102.35M

Key Highlights

  • 1Revenue increased by 13.6% to $2.08 billion in fiscal year 2013, compared to $1.83 billion in fiscal year 2012.
  • 2The Converged Packet Optical segment was the strongest performer, with revenue up 24.8% to $1.19 billion, indicating strong demand for next-generation optical transport solutions.
  • 3Net loss improved to $85.4 million in fiscal year 2013, from $144.0 million in fiscal year 2012, though the company remained unprofitable.
  • 4Cash and cash equivalents decreased significantly to $346.5 million at the end of fiscal year 2013, down from $642.4 million at the end of fiscal year 2012, largely due to debt repayment.
  • 5AT&T represented a significant portion of revenue (17.9%), highlighting customer concentration risk.
  • 6Research and development expenses remained high at $383.4 million, reflecting ongoing investment in innovation.
  • 7Ciena announced its intention to transfer its stock listing from NASDAQ to the New York Stock Exchange.

Frequently Asked Questions

Ciena is a network specialist providing networking solutions, including equipment, software, and services, for communications service providers and other network operators. Its strategy focuses on promoting its 'OPn Architecture' for next-generation, converged networks that are scalable and software-programmable, driven by increasing network traffic from mobility, cloud services, and data demands.

In fiscal year 2013, Ciena reported a revenue of $2.08 billion, a 13.6% increase from $1.83 billion in fiscal year 2012. The company's net loss improved to $85.4 million from $144.0 million in the prior year, indicating progress towards profitability. The Converged Packet Optical segment showed particularly strong growth.

Ciena faces significant risks including intense competition from larger players, customer concentration (a few large service providers account for a substantial portion of revenue), reliance on third-party suppliers for components, potential for unfavorable contract terms, and the need for continuous investment in R&D to keep pace with rapidly evolving technology.

Ciena has never paid cash dividends on its capital stock and does not anticipate paying any in the foreseeable future. The company intends to retain its earnings for use in its business.