Ciena Corp has a market cap of $1.25 billion; its shares were traded at around $13.89 with and P/S ratio of 0.7.
Highlight of Business Operations:Gross profit on products as a percentage of product revenue increased due to higher margin on Packet-Optical Transport products, partially offset by increased provisions for inventory excess and obsolescence. Gross profit for the first six months of fiscal 2011 also benefited from a $6.9 million reduction in warranty provision due to our consolidation of certain support operations and processes that resulted in lower costs to service future warranty obligations. The reduction was partially offset by a higher cost of goods sold of $5.7 million in fiscal 2011 due to the required revaluation of acquired finished goods inventory of the MEN Business to fair value.
Cash provided by accounts receivable during the first six months of fiscal 2012, net of $1.1 million in provision for doubtful accounts, was $19.1 million. Our days sales outstanding (DSOs) decreased from 83 days for the first six months of fiscal 2011 to 80 days for the first six months of fiscal 2012.
Our total deferred revenue for products was $42.9 million and $42.6 million as of October 31, 2011 and April 30, 2012, respectively. Our services revenue is deferred and recognized ratably over the period during which the services are to be performed. Our total deferred revenue for services was $80.9 million and $87.2 million as of October 31, 2011 and April 30, 2012, respectively.
For fiscal 2012, the Compensation Committee has approved an annual cash incentive arrangement generally applicable to full-time employees excluding commissioned salespersons, with the aggregate amount of any awards payable dependent upon the achievement of certain financial and operational goals for fiscal 2012. Given that the awards are generally contingent upon achieving annual objectives, the payment of cash incentive awards is not expected to be made until after fiscal year-end results are finalized. As a result, the expense that we accrue for incentive compensation in any interim period in fiscal 2012 is based upon estimates of expected financial results for the year and expected performance against relevant operating objectives. Because assessing actual performance against many of these objectives cannot generally occur until at or near fiscal year-end, determining the amount of expense that we incur in our interim financial statements for incentive compensation involves management judgment. Amounts accrued are subject to change in future interim periods if actual future financial results or operational performance are higher or lower than expected. We incurred an aggregate of $10.8 million of expense in the first six months of fiscal 2012 associated with our cash incentive bonus plan for fiscal 2012.
these practices exposes us to the risk that our customers will not order products for which we have forecasted sales, or will purchase less than we have forecasted. Historically, we have experienced write downs due to changes in strategic direction, discontinuance of a product and declines in market conditions. If actual market conditions worsen or differ from those we have assumed, if there is a sudden and significant decrease in demand for our products, or if there is a higher incidence of inventory obsolescence due to a rapid change in technology, we may be required to take additional inventory write-downs, and our gross margin could be adversely affected. We recorded charges for excess and obsolete inventory of $6.4 million and $14.0 million in the first six months of fiscal 2011 and 2012, respectively. The charges in fiscal 2011 were primarily related to excess inventory due to a change in forecasted sales across our product line. The charges in fiscal 2012 were primarily related to engineering design changes and the discontinuance of certain parts and components used in the manufacture of our Packet-Optical Transport and Packet-Optical Switching products. Our inventory net of allowance for excess and obsolescence was $230.1 million and $242.7 million as of October 31, 2011 and April 30, 2012, respectively.
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