Tellabs Slowdown Surprises Street
Tellabs reported a net loss of $138 million, or 38 cents a share, on revenues of $314 million during the third quarter of 2011. That compares to the year-ago quarter, when Tellabs recorded a profit of $57 million, or 15 cents a share, on revenues of $430 million.
"We are targeting fourth-quarter 2011 revenue to be flat to slightly up, but given our lower visibility into customers' spending, we are guiding to a broader range from $300 million to $330 million," the company said in a statement.
Though Tellabs has been laying off workers to cut costs, the revenue drop was still surprising. JP.MorganChase analyst Rod Hall wrote in a note to clients that Tellabs' fourth-quarter guidance missed Wall Street's estimates by 9 percent and "ours by 14%." The capex slowdown bit Tellabs the hardest in North America, where sales fell 8 percent, compared to a 4 percent slowdown in international sales.
“We’re disappointed by third-quarter revenue in North America,” said Rob Pullen, Tellabs president and CEO, in statement. “Yet we’re encouraged by the continuing growth of our business outside North America, which generated more than half of Tellabs' quarterly revenue for the first time.”
— Phil Harvey, Editor-in-Chief, Light Reading