Tellabs Q3 revenue down, Q4 outlook flat to slightly up

Tellabs (Nasdaq: TLAB) has yet to see its fortunes turn upward as the vendor reported $314 million in Q3 2011 revenue, down from $430 million in the same quarter a year ago.

From a geographic perspective, Tellabs' revenue mix was a tale of two continents, as North American revenue declined to $151 million while international revenue rose to $163 million.

A big contributor to the Q3 decline was a $138.2 million or $0.38 per share loss, compared to prior year's net earnings of $56.8 million or $0.15 per share. Analysts expected the company to report a loss of $0.02 per share.

The losses included previously announced restructuring charges of $20 million in addition to a non-cash goodwill impairment charge of $83 million, and a non-cash in-process R&D impairment charge of $20 million.

"We're disappointed by third-quarter revenue in North America," Rob Pullen, Tellabs president and CEO, said in the earnings release. "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."

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

  • Broadband/Data: Tellabs' broadband segment revenue was $170.1 million, down from $199.2 million in Q3 2011. The vendor reported that managed access product sales were offset by lower data and access revenue. For the quarter, managed access revenue was $46.3 million, up 53.3 percent compared with $30.2 million.

  • Transport: Ongoing revenue declines digital cross-connect systems and optical transport systems drove transport revenues down to $86.6 million from $170.1 million in the same period a year ago. Overall transport segment profit was $4.6 million, compared with $71.6 million in Q3 2010.

  • Services: During the quarter, services segment revenues were $164.3 million, compared with $182.1 million in Q3 2011. The decline in segment revenue was driven primarily by lower deployment revenue, which was partially offset by higher support revenue. Services segment profit was $54.4 million, compared with $62.7 million. Tellabs attributed the decline in the services segment profit to higher professional and support services revenue, which was partially offset by lower revenue from deployment services.

Looking into Q4 2011, the vendor has forecast "fourth-quarter revenue to be flat to slightly up, and is guiding to a broader range from $300 million to $330 million."

For more:
- see the release (pdf)

Earnings summary: Wireline in the third quarter 2011

Related articles:
Tellabs forced to cut 10% of workforce as revenue declines 21%
Tellabs Q1 2011 revenue declines 15 percent; sees potential in the mobile Internet segment
Ovum: Optical component segment revenue rose 35% in 2010
Competition eats into Tellabs Q4 earnings

Suggested Articles

Zayo provides a key element to the project – a backbone fiber network that will link multiple rural markets.

The company is launching its first fiber connectors that are specifically designed to work with 5G small cells.

Veego Software, an Israel-based startup that uses AI to detect and fix problems in connected homes, announced its Home Scoring solution on Thursday.