Ciena Corporation (NASDAQ: CIEN) is set to report its earnings on March 5. The company specializing in the transition to service-driven networks has been in the news for its CEO compensation lately. Gary B. Smith, the president and chief executive of Ciena Corp., received a compensation package valued at $5.3 million in fiscal 2008, up 14 percent from the prior year, according to a proxy statement filed by the communications equipment maker on Monday. Smith, who has served as the company's CEO since 2001, received a salary of $626,923 for the fiscal year, which ended in October - up 23 percent from 2007, according to a filing with the Securities and Exchange Commission. He also received $568,750 in non-equity incentive plan compensation, down nearly 12 percent from the previous year. Like many companies, Ciena ties cash incentives to its financial performance. Smith's perquisites totaled $19,643, a nearly 12 percent increase from a year earlier. They included financial planning and tax preparation services and 401(k) plan matching contributions. Making up the bulk of the compensation package, Ciena also granted Smith stock options valued at $4 million on the day they were granted, up 18 percent from a year earlier. It should be noted that Ciena's shares plunged 80 percent during the fiscal year, closing at $9.61 on Oct. 31, 2008. In December, the company posted a fourth-quarter loss, missing Wall Street's expectations as revenue declined amid the economic turmoil.

More recently, a Credit Suisse analyst downgraded the stock, citing the decline in capital spending from phone carriers. In a client note, Credit Suisse analyst Paul Silverstein said "few if any communications equipment suppliers are likely to escape the ongoing downturn unscathed." Silverstein projects a spending decline among communications carriers of 10.2 percent in 2009 and a further 0.4 percent decline in 2010. He downgraded Ciena to "Underperform" from "Neutral." In a contrast to Credit Suisse, in early January, Barclays raised its recommendation on the shares, which have fallen heavily over the past year amid worries of slower network spending by phone companies like AT&T, to "overweight" from "equal weight."

Ciena recently deployed the CN 4200® FlexSelect® Advanced Services Platform to deliver high-performance, low-latency storage and Local Area Network (LAN) connectivity between  data centers for Kärntner Elektrizitäts-Aktiengesellschaft (KELAG), a regional electricity supplier in Austria. Also, RENATER, the national research and education network in France, has chosen the CN 4200® FlexSelect® Advanced Services Platform to create a proprietary mesh WDM network spanning the entire country.

Earnings Estimates
Current Estimates: ($0.12)
Number of Estimates: 11
High Estimate: ($0.07)
Low Estimate: ($0.22)
Last Year EPS: $0.39
Percentage Growth: -132.00 %

Disclosure: The author does not own any of the stocks mentioned above.