Tellabs Sinks on $1B Loss
The vendor also announced revenues of $424 million, down 7 percent from a year ago but roughly in line with expectations.
Excluding most of those charges in its non-GAAP numbers, Tellabs managed a profit of $19 million, or 5 cents per share, slightly better than analysts had expected.
But there's worse to come. Tellabs says it's not expecting to see the usual seasonal fourth quarter hike in revenues. Instead it expects its fourth quarter revenues to be around the same, or worse, than the third quarter's revenues, providing a range of $400 million to $424 million. Analysts had, on average, been expecting revenues of nearly $441 million. Fourth-quarter gross margins are expected to be up slightly on the third quarter's 38 percent.
The company's share price fell $0.46, more than 11.7 percent, to $3.45 at the close of trading Tuesday.
Downsizing to focus
The restructuring charges recorded in the third quarter are just the start of a downsizing process that will see Tellabs ax 280 positions, or 8 percent of its staff, taking its headcount down from around 3,500 to about 3,220. The company will record charges of between $23 million and $27 million in the fourth quarter as it makes those cuts.
Tellabs says it will now concentrate its future investments on three main areas -- mobile backhaul, optical networking, and business services -- and invest more in its sales channels.
— Ray Le Maistre, International News Editor, Light Reading