Tellabs' financial woes continue in Q1 as revenue slides to $258M

Tellabs' (Nasdaq:TLAB) ongoing financial challenges continued in the first quarter of 2012, with its revenues declining to $258 million year-over-year from $322 million in Q1 2011.

For Q1, the Naperville, Ill.-based vendor reported a net loss of $140 million, or 38 cents per share, compared to its net loss of $24 million, or 7 cents per share, in the same period a year ago.

From a geographic standpoint, North American revenue (both U.S. and Canada) was $126.6 million, or 49 percent of total revenue, compared to $175.1 million, or 54 percent of total revenue, in Q1 2011.

Meanwhile, Tellabs' revenue from customers outside North America was $131.3 million, or 51 percent of total revenue, compared with $147.3 million, or 46 percent of total revenue.

A decline in the company's revenues from its Europe Middle East and Africa region and the Asia Pacific market were partially offset by an uptick in revenue from Tellebs' Latin American-Caribbean region.

"The first quarter of 2012 was tough, yet we made progress on advancing Tellabs' solutions and products," Rob Pullen, Tellabs CEO and president, said in the quarterly earnings release. "Looking ahead to the second quarter, we're encouraged by solid bookings and we expect to see revenue growth and profitability on a non-GAAP basis."

The vendor's ongoing financial struggles forced it to in January to cut another 530 jobs--its second round of layoffs since last July--as a means to cut costs and try to regain profitability.

Here's a breakdown of the company's key segment metrics:

  • Broadband/Data: Tellabs reported that broadband segment revenue was $130 million down 24 percent from $173 million in Q1 2011. Within this segment, increased revenue from managed access products was offset by lower revenue from data- and access products. One bright spot in the portfolio was managed access, where revenue rose 48.1 percent, to $39.1 million from $26.4 million in Q1 2011, due to an increase in SDH transport systems and managed access systems sales. However, data product revenue declined from $106.5 million to $55.1 million, a factor related lower revenue from managed-edge systems and its multiservice router series. Finally, access revenue was $35.9 million, down from $40.1 million, as increased revenue from single-family optical network terminal (ONT) units was more than offset by lower revenue from access systems.
  • Transport: Transport segment revenue declined almost 20 percent, to $80 million, from $99.4 million in Q1 2011, due to declines in digital cross-connect systems and optical transport system revenues. Likewise, transport segment profit was $8.2 million, compared with $16.0 million in Q1 2011.
  • Services: Services segment revenue declined 3.6 percent to $48 million from 50.0 million in the year ago quarter. Tellabs attributes the decline in services revenue to lower deployment revenue, which more than offset higher professional services revenue. However, services segment profit rose 3.6 percent to $15.2 million from $10.0 million from the year ago period due to lower services costs.

Looking forward, the vendor has forecast Q2 2012 revenues of $280 million to $305 million.

The company's stock closed at $3.81 at the end of Thursday trading on the NASDAQ stock exchange.

For more:
- see the release (pdf.)

Special report: Wireline in the first quarter of 2012

Related articles:
Tellabs aligns with NEC Networks, SI to target Japanese packet optical opportunities
Tellabs' Q4 2011 losses drive more company layoffs
Tellabs Q3 revenue down, Q4 outlook flat to slightly up
Dell'Oro: Optical transport revenues to reach $19B by 2016
Tellabs forced to cut 10% of workforce as revenue declines 21%

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