DOW JONES NEWSWIRES
Tellabs Inc.'s (TLAB) first-quarter net income tumbled 61% amid
lower demand as customers remain cautious about spending for
telecommunications equipment.
The supplier of voice, data and video systems reported net
income of $6.5 million, or 2 cents a share, down from $16.6
million, or 4 cents, a year earlier. Excluding restructuring and
other charges, earnings fell to 6 cents from 8 cents. Analysts
polled by Thomson Reuters most recently were looking for earnings
of 3 cents a share on average.
Revenue decreased 22% to $361.7 million, in line with the
company's January projection of $345 million to $375 million.
Gross margin rose to 44.2% from 38.3% amid higher data revenue
and improved margins for its access and optical networking
products.
For the second quarter, the company expects revenue will be flat
to up by as much as the high-single digits on a percentage basis
from the first quarter, and margin will be flat to up or down as
much as two percentage points. Analysts expected revenue of $377
million.
President and Chief Executive Rob Pullen said data products
continued to be the fastest growing category in the latest quarter,
with revenue up 45%. However, it was not enough to offset declines
in the rest of its broadband business, which makes up more than
half of Tellabs sales and where revenue fell 12%. Its transport
business saw revenue tumble 37%.
The company's phone and Internet clients include giants such as
AT&T Inc. (T) and Verizon Communications Inc. (VZ), which are
being cautious on capital spending. The global recession is just
the latest challenge for the telecom networking industry, on top of
increased competition from low-cost Asian rivals and weakening
leverage amid consolidation in the telecommunications sector.
Shares closed at $4.99 on Monday and didn't trade premarket. The
stock is up 21% this year.
-By Tess Stynes, Dow Jones Newswires; 201-938-2473;
tess.stynes@dowjones.com