J.P. Morgan Previews Ciena FQ2'11

In its FQ2'11 preview of Ciena (NASDAQ: CIEN), J.P. Morgan said that it believes that US optical spending remains strong.

“However, European telecoms trends began to show signs of weakness in Q1, and CIEN now has material exposure there through its Nortel assets,” J.P. Morgan writes. “We believe the combination of trends could lead to weaker guidance than consensus expects for FQ3.

“We are forecasting FQ3 revenue of $449.2m (cons. = $454.2m), gross margin of 42.5%, Opex of $184.2m, EBIT of $7.0m (cons = $10.1m), EBIT margin of 1.6% (cons. = 2.2%), and an EPS loss of $0.04 (cons. = $0.06).”

Ciena closed Monday at $24.08.