Tellabs' loss narrows, sales dip

By Susan Rush
from CED Broadband Direct, July 17, 2002

Tellabs Inc. managed to lower its year-over-year net loss in the second quarter, but revenue dipped 32 percent.

The company lowered its operating expenses during the quarter, which resulted in a narrower loss of $142.8 million, or 35 cents a share. This compares to a loss of $174.1 million, or 43 cents a share, in the second quarter 2001.

For the just-ended quarter, Tellabs posted pro forma net income of $565,000, or break-even per share, excluding $108 million in restructuring charges and $111 million in expenses related to excess inventory and purchase commitments. Analysts on average were expecting a profit of 1 cent a share, excluding items, according to Thomson Financial/First Call.

Second-quarter sales fell 32 percent from $509.4 million a year earlier to $344.6 million.

Sales from broadband access solutions totaled $107 million. During the quarter, the company launched its Tellabs 8110 network terminating unit in Asia Pacific, Europe and Latin America.

In April, Tellabs announced plans to cut another 1,200 jobs, close a manufacturing facility in Ronkonkoma, N.Y., and consolidate several smaller locations. Tellabs has cut 3,700 positions.

As of 12:36 p.m. EDT, Tellabs shares were up 10 cents to $6.60. The company's shares have traded as high as $18.28 in the last 52 weeks.

With several other telecom companies reporting financials this week, Tellabs is not the only one under The Street's watchful eye. The latest to report: Motorola Inc. and RealNetworks Inc.

Motorola Inc.
In the second quarter, Motorola Inc. suffered its biggest net loss to date: $2.3 billion. The loss was primarily fueled by the $1.3 billion loss in its semiconductor unit.

Motorola posted a net loss of $2.32 billion, or $1.02 a share, compared with a loss $759 million, or 35 cents, a year earlier. Revenue fell from $7.29 billion a year earlier to $6.74 billion.

Orders in Motorola's Broadband Communications Sector unit fell 45 percent to $420 million as a result of the continuing decline by cable operators in their purchases of subscriber equipment -- most notably Adelphia Communications Corp., Motorola said in a statement. The unit recorded sales of $554 million, down 32 percent compared to the year-ago quarter.

The company provided the Street a little hope with its third-quarter outlook, which calls for the company to post a small profit. Third-quarter sales are expected to be $6.7 billion. Full-year 2003 sales are forecast to be $29 billion, with earnings of 45 cents a share. Motorola shares were up 47 cents to $15 as of 12:34 p.m. EDT.

RealNetworks Inc.
RealNetworks posted a narrower second-quarter loss of $1.5 million, or 1 cent per share. In the same period a year ago, the company reported a loss of $19.9 million, or 12 cents per share.

The results were in line with the revised outlook RealNetworks offered last month, calling for a loss between 1 cent and 2 cents a share. Sales also were in line with its revised outlook. The company posted sales of $43.8 million, down from $47.86 million in the year-ago period. Real was expecting to report income of between $42.5 million and $45 million.

RealNetworks shares were down 12 cents to $4.06 as of 1.01 p.m. EDT.