Tellabs misses by a penny

Tellabs today fell short of pro forma expectations for the second quarter, posting $565,000 in income, or break-even earnings per share, compared with the 1-cent EPS that analysts had predicted.

For the quarter ending June 30, Tellabs reported sales of $344.6 million, down from $506.4 million in sales from the last quarter. Net loss for the quarter was $143 million, or 35 cents per share, compared with a 43-cent loss year over year. These figures include charges of $108 million for restructuring and $111 million related to excess inventories and purchase commitments.

Optical networking systems were the largest contributor to this quarter’s sales at $162 million. That figure, though, is down 10% sequentially. Sales of broadband access solutions totaled $107 million, down 7% quarter over quarter.

Today’s conference call marked the first presided over by Michael Birck, a Tellabs founder who served as CEO from 1975 to 2000 and remained on as chairman throughout Notebaert’s tenure. Not surprisingly given the continuity in leadership, Birck said there would be very little change in strategy under his leadership.

Citing low visibility, he also declined to give any guidance for the rest of the year, but did say he expects the sector to remain in its current state through 2002 and maybe 2003 and that Tellabs will have to adjust its spending to meet market conditions.

“Virtually all of [Tellabs major customers], are purchasing very much on a day-to-day basis,” he said. This means we have to adjust our own spending and our own planning, and as you know we’ve been doing that for some time. I suspect that we may have some more adjusting to do because our goal is to remain profitable with positive cash flow if at all possible.”

Tellabs stock was up almost 4% to $6.75 in mid-day trading.