LOS ANGELES (AP) -- Shares of high-speed networking technology company Ciena Corp. fell Monday after an analyst said that he lacks confidence in the company's ability to achieve its financial targets in 2013.
THE SPARK: Raymond James analyst Simon Leopold recommended "staying on the sidelines" after meeting with investors and Ciena management.
He said that Ciena is not benefiting from key growth areas in networking including wireless and cloud computing. He said he thinks that Ciena's ability to move data at 100 Gigabits per second over fiber optic lines would be an advantage over time, but that this would not manifest itself within a year.
Leopold also noted that Ciena's Aug. 30 earnings report predicted sales in October of $455 million to $485 million, below analysts' expectations for sales of $501 million in the quarter. After that outlook, shares in the company fell 20 percent, "to levels we consider reasonable," he said.
THE BIG PICTURE: Ciena offers companies the ability to improve the capabilities and efficiency of their data network. It specializes in fiber optic cables, Ethernet and network automation.
THE ANALYSIS: Leopold said that the company's ability to predict business in coming quarters is "poor" and that he expects the company's business to improve no earlier than the quarter through April of next year. He has no target price on the shares, which he rates "Market Perform."
SHARE ACTION: Ciena shares fell 43 cents, or 2.9 percent, at $14.43 Monday. That's below a 52-week high of $18.39 reached in mid-August.