Following the second-quarter 2012 earnings announcement on July
26, 2012, the analysts covering
) have neither increased nor decreased the EPS estimates.
First Quarter Highlights
On a GAAP basis, net loss in the second quarter of 2012 was $5.0
million or a loss of $0.01 per share compared with a net loss of
$29.0 million or $0.08 per share in the prior-year quarter.
However, adjusted (excluding special items) earnings per share
in the reported quarter came in at $0.01, better than the Zacks
Consensus Estimate of a loss of $0.01. Quarterly total revenue of
$288.1 million was down 9% year over year, and exactly in line with
the Zacks Consensus Estimate.
Quarterly GAAP gross margin was 39.6% compared with 36.4% in the
year-ago quarter. Quarterly operating margin was 0.6% as opposed to
a negative 11.1% in the year-ago quarter.
Agreements of Analysts
Of the six analysts covering the stock in the last 7 days, none
have revised the estimates for the third and fourth quarter of
fiscal 2012. Likewise, for fiscal 2012 and 2013, in the last 7
days, out of the six analysts covering the stock, none have revised
the estimates upward or downward.
Currently, the Zacks Consensus EPS Estimate for the third
quarter of fiscal 2012 is pegged at breakeven. The projected annual
growth is 66.67%. Similarly, for the fourth quarter of 2012, the
current Zacks Consensus EPS Estimate of 1 cent indicates a
year-over-year growth of 166.67%.
Magnitude of Estimate Revisions
During the last 7 days, the current Zacks Consensus Estimate for
the third quarter of 2012 were at breakeven with the previous Zacks
Consensus Estimate. Likewise, for fiscal 2012, the current Zacks
Consensus Estimate was at par with the earlier estimate of a loss
of 4 cents per share. However, for fiscal 2013, in the last 7 days,
the current Zacks Consensus Estimate was in line with the previous
estimate of 2 cents.
Tellabs produced an earnings surprise of 1 cent or 200% in the
last quarter with an average earnings surprise of 66.67% in the
trailing four quarters. There are upside potentials (essentially a
proxy for future earning surprises) of 0.00% for the ongoing
quarter and the next quarter. However, for fiscal 2012, the Zacks
Consensus Estimates downside potential is 0.00% while 2013 contains
a downside risk of 50.00%.
Despite healthy balance sheet and slightly better financial
results, our major concern for Tellabs is the increasing
competition in its core wireless backhaul solutions segment.
Tellabs already lost a significant amount of business from its most
Moreover, Tellabs' globally reputed high-margin digital
cross-connect products continued to show a downtrend. We, thus,
maintain our long-term Neutral recommendation for Tellabs.
Currently, Tellabs has a Zacks #3 Rank, implying a short-term
Hold rating on the stock.
About Earnings Estimate Scorecard
Len Zacks, PhD from MIT, proved over 30 years ago that
earnings estimate revisions are the most powerful force impacting
stock prices. He turned this groundbreaking discovery into two of
the most celebrating stock rating systems in use today. The Zacks
Rank for stock trading in a 1 to 3 month time horizon and the
Zacks Recommendation for long-term investing (6+ months). These
"Earnings Estimate Scorecard" articles help analyze the important
aspects of estimate revisions for each stock after their
quarterly earnings announcements. Learn more about earnings
estimates and our proven stock ratings at:
AT&T INC (T): Free Stock Analysis Report
TELLABS INC (TLAB): Free Stock Analysis Report
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