Tellabs Q1 revenue declines to $209 million on challenges in Europe, Mexico

Tellabs' (Nasdaq: TLAB) first-quarter revenue declined year-over-year to $209 million, down from $258 million in Q1 2012, due to lower sales in Western Europe and regulatory uncertainty in Mexico.

The vendor narrowed to its GAAP loss to $56 million or $0.16 loss per share from $140 million or $0.38 loss per share in Q1 2012.

Dan Kelly, Tellabs CEO and president, said in the earnings release that, "We're working to revitalize Tellabs' performance with a focus on customers, strategy and results" with a focus on enhancing its optical and mobile product segments.  

Over the past few quarters, Tellabs has been cutting costs by conducting layoffs and cutting product lines such as 9200 platform.

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

  • Optical: Optical segment revenue was $93 million, down year-over-year from $104.4 million in Q1 2012. New revenue from its 7100 optical transport system was more than offset by lower revenue from declines in both its 6300 managed transport systems and 5000 digital cross-connect systems. Optical segment profit also declined 10.8 percent to $12.8 million from $14.8 million.
  • Data: Driven by lower revenue from the Tellabs' 8600 and 8800 smart routers and the 8100 managed access systems, data revenue also declined year-over-year to $33 million $69.4 million.
  • Access: Strong sales of the 1600 single-family Optical Network Terminals (ONTs) and the 1000 access systems helped drive up the access segment 8.6 percent to $39 million, compared with $35.9 million in Q1 2012. However, Tellabs' 1100 access systems revenue remained flat. Access segment profit, driven primarily by the higher level of revenue and improved product gross margins, grew to $8.2 million, up 28.1% from $6.4 million.
  • Services: Service revenues declined to $44 million from $48.2 million in the same period a year ago. The decline in segment revenue was driven primarily by lower deployment, support agreement and professional services revenue. Likewise, services segment profit was $14.6 million, down from $15.2 million in Q1 2012 due to lower services revenue, which more than offset improved services gross margins.

Looking toward Q2 2013, Tellabs has forecast revenue to be in a range from $200 million to $220 million and non-GAAP gross margin to be 36 percent, plus or minus a point or two.

Shares of Tellabs were listed at $1.91, down 0.08, 3.79 percent, in morning trading on the Nasdaq stock exchange on Friday.

For more:
- see the earnings release (.pdf)

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