Ciena (CIEN) Plummeting Pre-market

Ouch, did I mention how technology is a safe haven because it is not exposed to oil? I know I know, that was last quarter's thesis - we've now moved on to "the consumer is back because gas is down 50 cents". Former fund holding Ciena (CIEN) is out with a horrific result this morning with some terrible guidance to boot. We got out in July in the mid $22s with a loss; with the stock in the low $14s premarket (down 20%) that does not seem so bad. Remember, technology is a safe haven because the business cycle does not effect Ciena. Also, the US economy is booming or will be doing so soon as the rest of the world slows down... HAL9000 says so (government reports too!).

• U.S. communications equipment maker Ciena Corp (CIEN) reported a 59 percent drop in quarterly profit and forecast current quarter revenue that would be far below Wall Street estimates because of order delays, triggering a 20 percent fall in its shares.
• The company, which sells optical switches and other products that support Internet protocol networks, warned on Thursday that many phone service providers were delaying orders as a result of economic uncertainty. (what economic uncertainty? Clearly the government reports show everything is fine and further the US consumer is now back with gasoline down 50 cents - hello, are these companies not watching CNBC?)
• Ciena's customers include top U.S. phone company AT&T Inc (T) and Sprint Nextel Corp (S). "In addition to existing customer-specific challenges, we have recently begun to experience order delays from many of our Tier One service provider customers, which we attribute to their guarded approach to capital expenditures given the uncertain macroeconomic environment," Chief Executive Gary Smith said in a statement.
• "While we've seen no project or order cancellations, sales cycles are lengthening and some deployments are slowing."
• Ciena forecast revenue in its current, fiscal fourth quarter in a range of $190 million to $210 million, dramatically below the market's forecast of $264 million according to Reuters Estimates. It had previously forecast annual revenue growth of up to 27 percent.
• For its fiscal third quarter that ended July 31, Ciena reported net profit fell to $11.7 million, or 12 cents a share, from $28.3 million, or 29 cents a share, a year earlier.

No position

(chart does not reflect 20% drop in premarket)