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Earnings reports

Tellabs Delivers Final Earnings Fizzle

In what was very likely its final quarterly earnings report as a public company, Tellabs missed analysts' revenue estimates for the third quarter by a wide margin, and showed further evidence that it is losing traction with long-standing customer Verizon Communications.

Separately, Marlin Equity Partners , which two weeks ago announced it was acquiring Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) for $891 million, said it has commenced its tender offer for all outstanding shares of Tellabs at $2.45 per share. The tender offer expires on Dec. 2. The Tellabs board has already approved the sale of the company. (See: Tellabs to Be Sold to Marlin for $891M and Tellabs' Last Hope: Marlin's Optical Ambition.)

Having previously canceled its quarterly earnings call, Tellabs announced its third-quarter earnings via a 10Q filing with the SEC.

Revenue for the quarter came in at $198.5 million, well under the $212 million estimate of MKM Partners, according to Michael Genovese, communications equipment analyst at MKM. The revenue posting also represented a significant drop from the $264.4 million in revenue Tellabs posted for the same period last year. The vendor saw its net loss grow to $9.8 million, from $3.9 million in the third quarter last year.

Its optical sector revenue was $88.4 million, down about $20 million from the third quarter of 2012, and Genovese said in a research note after the filing that he believes the sales shrinkage in optical is connected to Tellabs losing metro optical business at Verizon to competitors such as Ciena, the vendor's one-time, would-be merger partner.

— Dan O'Shea, Managing Editor, Light Reading

brookseven 11/4/2013 | 11:48:17 AM
Re: Why is Tellabs hurting? Optical - The 7100 was sold primarily to Verizon.  There are other customers but it rose and fell with Verizon.  Customers have locked in the optical vendors so its not clear there is an easy path to new business.

Data - They nuked WiChorus and to do what their plans were with WiChorus they had stripped Vivace of people.  The only thing left is Finland and the 8600.  5 Years ago the 8600 was ahead of the pack.  Now the pack (particularly Huawei and Cisco) have caught or paseed them.

Access - They killed Access in 2009.  Last year Verizon did a last time buy on ONTs and that flowed through.  Now essentially they are down to D*SCUS and UMC sales.  Given that Tellabs purposely killed the IOC business, they are just really doing plug sales and some small number of new things at AT&T.

Here is the real question...Did Marlin overpay?

seven

 
DOShea 11/3/2013 | 8:33:33 PM
Re: Why is Tellabs hurting? Its optical, data and access units all saw revenue declines, and there is not much going right at this point. Marlin hasn't said much about how it's are going to reinvigorate Tellabs--the assumption is still that it will be integrated with Marlin's Coriant group in some way after the sale closes.
albreznick 11/3/2013 | 11:32:32 AM
Why is Tellabs hurting? Interesting, Dan. What happened at Tellabs? Why is it hurting so much now? What are the turnaround plans for it?
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