Tellabs Inc. (TLAB) posted a wider-than-expected second-quarter
loss and announced a restructuring plan that will cut annual
expenses by about $50 million.
The company also forecast third-quarter revenue of $325 million
to $345 million, while analysts surveyed by Thomson Reuters
currently expect $350 million.
Tellabs plans to eliminate about 330 jobs, or 10% of its work
force, through the second quarter of 2012. The company estimated
pretax charges at $13 million for the reductions and $9 million for
facility and asset-related charges.
"We are investing aggressively in research and development,
devoting one-fourth of our revenue to growth products, as we focus
on next-generation platforms to help customers succeed in the
mobile Internet," said President and Chief Executive Rob
Pullen.
This is the third consecutive quarterly loss for the
telecommunications-equipment maker, which has lately had a decline
in revenue in North America, the biggest contributor to its top
line. Tellabs has been increasing its research and development
spending to focus more on mobile Internet. This long-term growth
plan has also hurt the company's bottom line and margins in recent
quarters.
Tellabs reported a loss of $20.1 million, or 6 cents a share,
compared with a profit $64.1 million, or 16 cents, a year earlier.
Analysts polled by Thomson Reuters had most recently forecast a
loss of 3 cents.
Revenue dropped 21% to $334.2 million, compared with its April
forecast of $325 million to $345 million.
Gross margin fell to 37.4% from 53.5%.
Revenue from customers in North America dropped 46% to $177.2
million, while revenue outside North America increased 70% to $157
million.
Revenue for broadband--the company's biggest segment--declined
29%, while transport and services revenue fell by 14% and 6%,
respectively.
Shares closed Monday at $4.19 and were inactive premarket. The
stock has fallen 46% over the past year.
-By Melodie Warner, Dow Jones Newswires; 212-416-2283;
melodie.warner@dowjones.com