Hot optical telecoms equipment company Ciena Corp’s share price dropped nearly 28% on the news that WorldCom Inc was going to order less equipment than expected in the second quarter of the year. In Friday’s trading, Ciena stock closed down $16.125 at $42, a drop of 27.74%. Ciena is one of the major manufactures of dense wavelength division multiplexing equipment, a technology that enables telecoms carriers to boost the capacity of their fiber networks by forcing multiple colors of light down a single cable. The key advantage to the technology is that it enables carriers to boost network capacity for a tenth of the cost of laying new fiber. The company has, until now, being doing superbly, reporting first-quarter net profits up 205% at $39.8m on revenue up 149% to $134.3m. But the company has warned of a change in WorldCom’s buying strategy. Worldcom buys the majority of its DWDM equipment from Ciena, but last year it bought enough equipment to cover two years of anticipated demand. As a result, Ciena is anticipating sequentially lower net income for the second quarter.
รก
