) reported better-than-expected financial results for the second
quarter of 2013, beating the Zacks Consensus Estimate. GAAP net
loss in the reported quarter was $7.8 million or a loss of 2
cents per share compared with a net loss of $4.7 million or 1
cent per share in the prior-year quarter. Quarterly adjusted
(excluding special items) net loss per share of 1 cent was better
than the Zacks Consensus Estimate of a loss of 2 cents per
Second-quarter 2013 total revenue of $212.1 million was down
26.4% year over year but slightly higher than the Zacks Consensus
Estimate of $210 million.
Quarterly gross margin was 37.8% compared with 39.6% in the
year-ago quarter. Operating expenses, in the reported quarter,
were $84.3 million compared with $112.6 million in the prior-year
quarter. During the second quarter of 2013, the company
repurchased 2.3 million shares for a total consideration of $4.6
During the first half of 2013, Tellabs consumed $22.2 million
of cash for operations compared with $5.6 million in the
prior-year period. Free cash flow, during the reported period was
negative $29 million compared with negative $15.5 million in the
Tellabs exited second-quarter 2013 with $541.7 million of cash
and marketable securities on its balance sheet compared with
$604.4 million at the end of 2012. Further, there was no
outstanding debt on its balance sheet.
The Optical segment revenues were $112.7 million, down 7.9%
year over year. The decline was primarily driven by significantly
lower sales of the Tellabs 5000 digital cross-connects systems
and Tellabs 6300 managed transport systems. The segment profit
was $25.4 million compared with $29 million in the year-ago
Total revenue generated by the Data segment was $35.8 million,
down 53.9% year over year, hamstrung by lower sales of the
Tellabs 8100 managed edge systems and the Tellabs 8800 and 8600
multiservice router series. The segment generated a loss of $2.5
million compared with an operating income of $5.4 million in the
Total revenue of the Access segment was $19.4 million, down
48.6% year over year. The significant fall in revenues were
attributed to lower sales of Tellabs1600 single-family optical
network terminals. The segment's profit dropped to $1.3 million
from $6 million in the prior-year quarter.
Total revenue of the Service segment was $44.2 million, down
12.8% year over year, hurt by lower revenues generated from the
deployment services and support systems. The segment profit fell
to $14.8 million from $17.2 million in the prior-year
In the second quarter of 2013, the North American region
generated $123.4 million (58% of the total revenue) in revenues
compared with $137.9 million in the prior-year quarter. The rest
of the world generated the remaining $88.7 million (42% of total
revenue) compared with $150.2 million recorded in the year-ago
Management expects the company's third-quarter 2013 revenues
of $200 million to $220 million. Non-GAAP gross margin is
expected to be 37%, plus or minus 1 or 2 percentage points, based
on product mix. Non-GAAP operating expenses are expected to be
mid-$70 million. Non-GAAP tax rate is expected to be around
Other Stock to Consider
Tellabs currently has a Zacks Rank #3 (Hold). Other stocks in
this segment, which are worth considering, include
Juniper Networks Inc.
Mitel Networks Corp.
Sonus Networks Inc.
). Sonus currently has a Zacks Rank #1 (Strong Buy) while both
Juniper and Mitel have a Zacks Rank #2 (Buy).
JUNIPER NETWRKS (JNPR): Free Stock Analysis
MITEL NETWORKS (MITL): Free Stock Analysis
SONUS NETWORKS (SONS): Free Stock Analysis
TELLABS INC (TLAB): Free Stock Analysis
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