Following the first quarter earnings announcement on April 26,
most of the analysts covering
) have retained their estimates, as they remain apprehensive about
the increasing competition in its core wireless backhaul solutions
segment. Moreover, the company has already lost a significant
amount of business from its most important customer
First Quarter Highlights
On a GAAP basis, net loss in the first quarter of 2012 was
$139.8 million or 38 cent per share compared with a net loss of
$24.1 million or 7 cents per share in the year-ago quarter.
Adjusted (excluding special items) loss per share in the reported
quarter stood at 6 cents, significantly higher than the Zacks
Consensus Estimate of a loss of 3 cents.
Quarterly total revenue of $257.9 million was down 20% year over
year, and well below the Zacks Consensus Estimate of $277 million.
Sales deteriorated across all the reporting segments of
Agreements of Analysts
Of the 12 analysts covering the stock in the last 7 days, none
changed the EPS estimates for the third and fourth quarters of
Likewise, for fiscal 2012, out of the 13 analysts covering the
stock, none changed the EPS estimates in the last 7 days.
Similarly, for fiscal 2013, in the last 7 days, none of the 14
analysts covering the stock raised or lowered the EPS estimate.
Currently, the Zacks Consensus EPS Estimate for the second
quarter of fiscal 2012 stands at breakeven, which indicates a
growth of 100.00% year over year. Similarly, for the third quarter
of fiscal 2012, the Zacks Consensus EPS Estimate is pegged at 1
cent, reflecting 191.67% year-over-year increase.
Likewise, for fiscal 2012, the Zacks Consensus EPS Estimate is
pegged at a loss of 1 cent indicating a gain of 88.46% from 2011.
However, for fiscal 2013, the Zacks Consensus EPS Estimate stands
at 6 cents, reflecting an increase of 523.02%.
Magnitude of Estimate Revisions
In the last 7 days, the Zacks Consensus Estimates for the second
quarter was flat compared with the previous estimate. However,
estimate for the third quarter of 2012 was in line with the
previous estimate of 1 cent.
Likewise, for fiscal 2012, the current Zacks Consensus Estimates
was at par with the earlier estimate of a loss of 1 cent.
Similarly, for fiscal 2013, the Zacks Consensus Estimate was in
line with the previous estimate of 6 cents.
With respect to earnings surprises, the company's consistent
track record in the last three quarters is expected to persist in
the coming quarters. However, in the last quarter, Tellabs'
reported loss fell below the Zacks Consensus Estimate by 2 cents or
We believe that healthy balance sheet, regular dividend payments
and continuous contract wins will act as catalysts for growth for
the company going forward. However, poor performance in the North
American market coupled with high level of customer concentration
as the company generates more than 33% of the total revenue from
Verizon Communications Inc.
). We therefore retain our long-term Neutral recommendation on
Currently, it has a Zacks #3 Rank, implying a short-term Hold
rating in the near term.
About Earnings Estimate Scorecard
Len Zacks, PhD in mathematics from MIT, proved over 30 years
ago that earnings estimate revisions are the most powerful force
impacting stock prices. He turned this ground breaking 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
VERIZON COMM (VZ): Free Stock Analysis Report
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