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Tellabs Tanks in Q4

Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) stock has fallen $1.47 (21%) to $5.57 this morning on an earnings report that disappointed even the pessimistic analysts.

For its fourth quarter, which ended Dec. 31, Tellabs reported revenues of $410.5 million and net losses of $11 million, or 3 cents per share. Analysts were expecting profits of about 8 cents per share, according to Thomson Reuters .

The real hit came with Tellabs's first-quarter forecast of $315 million to $335 million in sales. The analyst consensus was $402.7 million. Some analysts were predicting a miss, including Ehud Gelblum of Morgan Stanley , but even he shot high, expecting a forecast around $389 million.

Why this matters
People are still worried about how Tellabs is doing inside of AT&T Inc. (NYSE: T). Gelblum specifically cited "continued weakness at AT&T" as the reason for his downbeat forecast.

In past quarters, AT&T has represented 20 percent of Tellabs's revenues, thanks largely to mobile backhaul. But signs in 2010 suggested Alcatel-Lucent (NYSE: ALU) could take a bite out of that business. (Ciena Corp. (NYSE: CIEN) is AT&T's other backhaul provider.)

Tellabs did tell Light Reading in July that it's partnering with Juniper Networks Inc. (NYSE: JNPR) to serve AT&T, but the company didn't elaborate at the time.

For more
Here's more on Tellabs' financial situation and the whole AT&T thing.

— Craig Matsumoto, West Coast Editor, Light Reading

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jggveth 12/5/2012 | 5:14:41 PM
re: Tellabs Tanks in Q4

bazny,


you really peaked my interest so i went back and looked at what you are talking about.  i think the analyst got the october quarter right.  ciena's organic sales were really weak. the stock reaction to good MEN numbers and the promise of 2011-2013 product cycles is another story althogther and the stock has done quite well since ... -inq.

jggveth 12/5/2012 | 5:14:41 PM
re: Tellabs Tanks in Q4

baznyankee,


Your post seems like a non sequitor but I think I saw where the analyst you mention just initiated CIEN with a buy rating at a new firm.  Pretty sure he had a sell on TLAB as well.


- inq

baznyankee 12/5/2012 | 5:14:41 PM
re: Tellabs Tanks in Q4

Craig,


Isn't this about where Michael Genovese puts out his "research" to enlighten us all on CIEN possible shortcomings, since he did so well on it last time. 


Noticed he wasn't even in attendance at CIEN last earnings conf. call, so maybe he wasn't invited after his last performance.

jggveth 12/5/2012 | 5:14:40 PM
re: Tellabs Tanks in Q4

bazny -- you seem to be in your own world. hope its nice there.


mark -- are you implying things are really bad at INFN or that CIEN may want to buy them or both?

baznyankee 12/5/2012 | 5:14:40 PM
re: Tellabs Tanks in Q4

In my opinion, the analyst posted nothing more than his own rumor that the company had a soft Sep. with a strong Oct. necessary to make the quarter, right after the company had reiterated their quarter numbers.  My position is that he (analyst) intended to drive the stock price down with that rumor, which worked brilliantly, but perhaps he lost his job as well.  Nothing in his call about "organic" sales. 


   

baznyankee 12/5/2012 | 5:14:40 PM
re: Tellabs Tanks in Q4

Thanks for the information inq., if it's correct as you think. 


Perhaps he (analyst) is trying to mend some fences.  Of course it's possible he didn't attend CIEN conf. call due to his being between employers.


The situation here was just too perfect for another one of his "research" projects.  Maybe it's someone else's turn in the barrel.   

Pete Baldwin 12/5/2012 | 5:14:40 PM
re: Tellabs Tanks in Q4

Genovese was transitioning jobs in December, and he hadn't initiated formal coverage on any companies at his new job. So, that's why you didn't hear him on the Ciena call.

spc_markl 12/5/2012 | 5:14:40 PM
re: Tellabs Tanks in Q4

Craig,


Speaking of Ciena, this announcement back in December may have more meaning than it appears on the surface.


http://www.lightreading.com/document.asp?doc_id=202003


Mark, Telecom Pragmatics

spc_markl 12/5/2012 | 5:14:39 PM
re: Tellabs Tanks in Q4

Inq: Are you sure that the current leader has the imagination to bring back a Rick Dodd – or was it a board member’s decision?


Bazny: Well, given this possibility, perhaps not anymore.


Mark

spc_markl 12/5/2012 | 5:14:39 PM
re: Tellabs Tanks in Q4

Inquisitive,


The most profound potential reason is a shift in the power structure at Ciena.  He is not ex-Nortel, and it has been the ex-Nortel people who have been in charge at the company – and they would probably not voluntarily give up control on the one thing they do best – offering a market vision.


Mark

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