Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Tellabs (NASDAQ:TLAB)

Q1 2011 Earnings Call

April 26, 2011 8:30 am ET

Executives

Tom Scottino -

Robert Pullen - Chief Executive Officer, President and Director

Timothy Wiggins - Chief Financial Officer and Executive Vice President

Analysts

Tal Liani - BofA Merrill Lynch

Mark Sue - RBC Capital Markets, LLC

Nikos Theodosopoulos - UBS Investment Bank

Blair King - Avondale Partners, LLC

Alex Henderson - Miller Tabak + Co., LLC

Jim Suva - Citigroup Inc

Rod Hall - JP Morgan Chase & Co

Jeffrey Kvaal - Barclays Capital

George Notter - Jefferies & Company, Inc.

Michael Genovese - MKM Partners LLC

Todd Koffman - Raymond James & Associates, Inc.

Ehud Gelblum - Morgan Stanley

Simon Leopold - Morgan Keegan & Company, Inc.

Unknown Analyst -

Simona Jankowski - Goldman Sachs Group Inc.

Operator

Good morning. My name is Ginger, and I will be your conference operator today. At this time, I would like to welcome everyone to the Tellabs Investor Relations Conference Call. [Operator Instructions] Mr. Tom Scottino, from Tellabs, you may begin your conference.

Tom Scottino

Thank you, Ginger, and good morning, everyone. With me today are Tellabs' CEO; Rob Pullen; and our Executive Vice President and CFO, Tim Wiggins. If you haven't seen the news release we issued this morning, you can access it at our tellabs.com website.

Before we begin, I'd like to remind you that this presentation contains forward-looking statements about future results, performance or achievements financial and otherwise. These statements reflect management's current expectations, estimates and assumptions. These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause Tellabs' actual results, performance or achievements to be materially different. A discussion of the factors that may affect future results is contained in Tellabs' most recent SEC filings.

The forward-looking statements made in this presentation are being made as of the time and date of its live presentation. If this presentation is reviewed after the time and date of its live presentation, it may not contain current or accurate information, and Tellabs disclaims any obligation to update or revise any forward-looking statement based on new information, future events or otherwise. This presentation may also include non-GAAP financial measures. Reconciliations between non-GAAP financial measures and GAAP financial measures can be found at our tellabs.com website in our SEC filings.

Having said that, I'll turn the call over to Rob.

Robert Pullen

Thanks, Tom, and welcome to our call everyone. Today, I'll lay out Tellabs' vision of the smart mobile Internet and discuss why we are increasing R&D investments in our growth products. I'll also provide more context for our first quarter results. While our first quarter results were within our guidance, of course, we wish they were better.

What you see this quarter reflects our conscious decision to increase our investment in R&D and drive our strategy to make Tellabs one of the top companies in the mobile Internet. Right now, Tellabs is making major investments in R&D to extend our existing platforms and launch new ones for the smart mobile Internet. Smart mobile networks will include our Smart Mobile Backhaul, smart packet core and analytics using our deep packet inspection [ph] technology. From a product perspective, smart mobile networks will use the Tellabs SmartCore 9100 platform, our next-generation platform that we're working on, as well as our Mobile Backhaul products, our 8600 and 8800 and our packet optical platform products, the Tellabs 7100 and 7300 systems.

In the first quarter, we increased our R&D investment by 16% year-over-year to $80 million. We invested approximately 25% of our first quarter revenues on R&D to advance our growth products. And you ask yourself the question, " Why?" It's because we are positioning Tellabs for long-term growth with the mobile Internet over the next decade, rather than sacrificing the potential for the sake of short-term profits. To be clear, we're willing to take some pain to pursue our mobile Internet vision. We intend to keep on investing on research and development as needed to advance the smart mobile Internet. We believe it's the right thing to do for the long-term success of our business.

As many of you have seen in Tellabs' annual report or on our website, we've articulated a clear and compelling vision about the future of mobile Internet. Everyone knows that mobile data traffic is growing rapidly due to smart phones, tablets and machine-to-machine communications but not everyone knows that existing mobile networks aren't going to be able to keep up with that traffic growth in any way that continues to be profitable for the mobile service providers over this period of time.

In the mobile Internet future we foresee, adding brut capacity to networks will not suffice. Networks need a new level of intelligence, too. In a study we released before Mobile World Congress, we noted that mobile operators' old business models are breaking down, which could lead to the loss of profitability over the next 3 to 5 years. Since then, we've been enriched in deep discussions with a number of our customers about how a smart mobile Internet can keep them in the black, even as mobile data traffic grows 10 to 40x over the next few years.

For example, one of our customers, with Tier 1 customers in our Europe, Middle East and Africa region, is adding Tellabs' Mobile Backhaul to address rapid growth in mobile data traffic, optimize their bandwidth and maximize profitability. Our discussion about today's Mobile Backhaul network turned into a brainstorm about our customers' network needs for tomorrow. This customer needs a way to monetize mobile Internet content and offer personalized services to users. They need a combination of analytics, Smart Backhaul and smart packet core, in short, the building blocks of a smart mobile network. That's because tomorrow's smart mobile network is radically different from today's existing mobile networks.

Let's talk about why that's crucial for our customers. First, the smart mobile network provides our customers with good visibility into traffic and applications. From a technical standpoint, it can do this because it processes communications at layers 2 through 7 rather than only layers 2 through 3 as done in traditional routers. We have on everyone of our packet core cards, the capability to go all the way down to layer 7 in the technology. The smart mobile network offers better visibility to the hotspots in the network and the causes for those hotspots. So then, our customers can immediately address the causes.

Second, along with visibility, smart networks offered customers greater control, which enables operators to prioritize traffic in a granular way. They can block damaging traffic such as viruses, as well as attempts to hack into smart phones. They can better price their services in line with the economics of the business.

Third, smart networks optimize capacity and resource utilization inside the network. That's the key to delivering a high quality of experience for the users. Users will stick with the operators, whose networks best meet their expectations for the mobile Internet.

Fourth, smart networks mean monetization. Operators can make money on the mobile Internet through advertising and applications based on sophisticated analytics. In short, smart mobile networks will provide Tellabs' customers a new competitive advantage. By rethinking the design and the capabilities of the networks, and adding the intelligence to provide visibility, control, optimization and monetization, our customers can transform their networks and their business models.

We recently had a meeting with a large Asian mobile operator. We discussed how to help our customers differentiate in a highly competitive mobile market. They wanted to differentiate by offering users very personalized services beyond what's been offered before. Some customers have already gone through the tiered pricing model. Others are thinking we want to offer individual, more customized services.

We are enabling our customers to specify the type of bandwidth, the type of access and the type of content available on a per user basis. That's how Tellabs can help our customer attain real differentiation through smarter mobile networks. With smart platform that deliver a better quality of experience to mobile users and provide the lowest cost per bit, mobile operators can gain exactly what they need to address today's and tomorrow's challenges to their business models.

That's why the smart mobile Internet is so important to our future and our customers' future. And we're confident that the Tellabs helps our customers succeed with the mobile Internet, we will achieve profitable revenue growth over the long term.

Now I'd like to update you on some progress on some of our new initiatives. In February, we announced a new Long Term Evolution, or LTE version of the Tellabs SmartCore 9100 platform, which is in customer trials now. Our mobile packet core for LTE networks will become generally available later this year, expanding our addressable market and arriving at the time when most of our global customers are making decisions about their LTE networks.

We also announced Tellabs' new smart Mobile Backhaul solution. Smart Mobile Backhaul uses analytics and the SmartCore 9100 platform to better provide visibility into the Mobile Backhaul networks and enable much more control through traffic engineering. We continue to work on next-generation platforms that are purpose built for the smart mobile Internet, designed to deliver superior user experience and also deliver personalized services and enable monetization. We're making good progress on our higher density, lower cost Ethernet Mobile Backhaul solution. Our new Tellabs 8609 is in customer labs now, and will become generally available in the second or third quarter of this year.

Last week, as most of you saw, we announced 2 major new customers, Russia's 2 largest mobile operators, both MTS and MegaFon. They're both using the Tellabs 8600 system for Mobile Backhaul. By the way, sales of the Tellabs 8600 system hit an all-time high in the first quarter this year.

Now turning to our Packet Optical business. Our new optical transport network, or OTN switch capability on the 7100 is in customer lab trials right now. It's on track to generate revenue in the second half of this year.

Now let me transition to the first quarter results. As I said, and Tim will give you more insight into this in the moment, our first quarter results were in line with our guidance. But as I said earlier, we wish they were better. First quarter 2011 revenue was $322 million or down 15% from the year ago quarter driven by lower revenue in North America and lower profitability.

On a positive note, our first quarter international revenue grew 40% year-over-year both in real percent, as well in actual dollars. We saw high interest in our Mobile Backhaul and smart packet core solutions from our customers, including during meetings we had at World Congress, the CTIA show and follow-up meetings after those -- after trade shows. Revenue from our growth products reached 60% in the first quarter. That was up from 56% in the fourth quarter 2010.

In first quarter of 2011, we recognized revenue from 8 new customers for our growth product. The Tellabs 8600 and 8800 systems dominantly used for Mobile Backhaul or business services delivery, gained 3 new customers in EMEA, the Europe, Middle East and Africa region, and our Latin American region. We achieved record sales -- or our best quarter ever for the Tellabs 8600 system.

Last week, as I mentioned, we announced MegaFon and MTS in Russia. Obviously, one of Tellabs' key growth markets. The Tellabs SmartCore 9100 platform gained 2 new customers in Asia-Pacific and in North America -- excuse me, 1 in each. We now have 20 customers for this platform and we're in about 15 customer trials that are in progress, including trials of our new LTE capability.

The Tellabs 7100 packet Optical Transport System gained 3 new customers in the first quarter, 1 in North America, 1 in the Europe, Middle East and Africa region and 1 in our Asia Pac region. Earlier this month, Frontier announced its deployment of the Tellabs 7100 system in North America.

Our non-GAAP first quarter '11 gross profit margins were 38.3%, essentially flat with the 38.2% from the fourth quarter. First quarter margins reflected more International Optical Networking business, which usually carries lower margin. We continue to work on cost to improve our gross margins over time, including with the introduction of new platforms. We worked to control operating expenses in the first quarter. On a non-GAAP basis, OpEx declined sequentially by $9 million. We're going to continue to keep a tight rein on our expenses, while as I mentioned earlier, continue to invest in research and development for the long-term success of Tellabs.

But due in heavy part to our R&D investment in the mobile Internet, we did record a first quarter net loss. To be clear, we made a conscious choice to increase R&D because we firmly believe it's the right direction for Tellabs' long-term profitable growth. As you saw by our announcement, on a GAAP basis in the first quarter, we lost $0.07 per share or $24 million. On a non-GAAP basis, we lost $0.03 per share or $11 million.

We're confident that Tellabs' balance sheet provides the financial strength to work through this technology and market transition. Our balance sheet remains solid with over $1 billion in cash and equivalents, and no debt. Tim is going to give you more details, but looking ahead in the second quarter, we expect second quarter 2011 revenue to be up in the range between $325 million and $345 million. We expect second quarter non-GAAP gross margin to be similar to first quarter 2011, plus or minus a point or 2 depending on product and customer mix. And we expect our second quarter non-GAAP OpEx to be down slightly in the low $140 million range.

With that, Tim, I'll turn it over to you.

Timothy Wiggins

Thanks, Rob, and good morning, everyone. To begin with, I'll give a few insights into the quarter, then dig into the numbers in more detail.

While revenue came in within the guidance range we gave you in January, the mix was different from what we expected at the beginning of the quarter. We had less revenue from customers in North America and more revenue from customers outside North America. And that shift affected both our gross margins and inventory. Gross margin, driven by the higher level of international revenue, as well as lower services gross margin came in within the guidance but at the low end of the range. We brought operating expenses in better than guidance. Tight control of expenses enabled us to reduce overall non-GAAP operating expense on a sequential basis, while increasing R&D as a percentage of revenue on products for future growth.

Let's take a look at the first quarter numbers. Total revenue in the first quarter 2011 was $322 million compared with $410 million in the prior quarter. On a sequential basis, revenue declined across all segments.

Looking at the Broadband segment, revenue declined sequentially, in all 3 categories of Access, Managed Access and Data. Within Transport, most of the sequential decline came from lower Optical Transport System revenue. Digital Cross-Connect system revenue also declined 12% sequentially, compared with the 50% rate of decline we saw from Q3 2010 to Q4.

GAAP net loss for the quarter, driven primarily by sequentially lower revenue, was $24.1 million or $0.07 a share. On a non-GAAP basis, net loss for the first quarter of 2011, excluding charges for special items was $10.9 million or $0.03 a share. If you take $10.9 million in non-GAAP net loss and add $7.7 million pretax, or $0.014 per share after tax for equity-based comp to be consistent with the way First Call Reuters compiles and reports estimates for Tellabs, the results rounds to $0.04 net loss for the first quarter.

On a geographic basis, North American revenue declined sequentially to account for 54% of total revenue. Revenue from customers outside North America accounted for 46% of total revenue in the first quarter compared with 41% in the prior quarter. On a year-over-year basis, international revenue grew 40% from Q1 '10 to Q1 '11.

On a portfolio basis, revenue from our growth portfolio accounted for 60% of total revenue in the first quarter, up from 56% in the prior quarter.

Let's take a look at the segment data for the first quarter. Broadband segment revenue for the first quarter 2011 was $173 million compared with $227 million in the prior quarter. Revenue from the Data Product category was $107 million in the first quarter compared with $120 million in the fourth quarter of 2010. Lower Data revenue from North America offset growth in the EMEA region. Access revenue, driven primarily by lower revenue from Single Family ONTs was $40 million in the first quarter compared with $70 million the prior quarter.

Turning to the Managed Access category, revenue in the first quarter of 2011 was $26 million compared with $37 million in the prior quarter. Taking all that into account, Broadband segment profit for the first quarter of 2011 was $20 million compared with $34 million in the prior quarter. The decline in segment profit was driven by lower overall segment revenue, partially offset by a $16.5 million charge for excess purchase commitments taken in the prior quarter.

Transport segment revenue, driven primarily by lower Optical Transport and Digital Cross-Connect system was $99 million in the first quarter of '11 compared with $123 million in the prior quarter. Transport segment profit, driven by the lower level of Optical Transport revenue was $16 million in the first quarter compared with $24 million in the prior quarter. Services segment revenue was $50 million in Q1 compared with $60 million in the prior quarter. Services segment profit was $10 million compared with $18 million the fourth quarter 2010, driven primarily by lower overall level of Services revenue and a less favorable mix of Services.

On a gross margin basis, non-GAAP gross margin for the first quarter of 2011 was 38.3% compared with 38.2% in the prior quarter when a $16.5 million charge for excess purchase commitments reduced gross margin for the quarter by 4 points. Excluding the impact of the charge, non-GAAP gross margin in the fourth quarter of 2010 would have been 42.2%.

So when I compare the 38.3% of margin in Q1 with the adjusted 42.2% margin for 4Q, the change looks like this: About 1 point of decline came from the lower Services gross margin, another point of decline came as semi-variable manufacturing costs were absorbed over the smaller revenue base; and we had about another 2 points of decline from higher warranty and excess and obsolete inventory costs.

Turning to operating expenses. Tight control of expenses enabled us to reduce overall non-GAAP operating expense on a sequential basis while increasing R&D as a percentage of revenue. Total OpEx on a non-GAAP basis came in at $142 million for all the prior quarter and lower than our guidance. Non-GAAP R&D expenses for the quarter declined slightly to $78 million but increased to 24% of revenue. SG&A expenses for the quarter were $64 million, down from $70 million in the prior quarter as we continue to put downward pressure on expenses while investing in products for future growth.

Other income on a non-GAAP basis amounted to $3 million in the quarter, which is consistent with the prior quarter. Our tax provision on a non-GAAP pretax earnings for the quarter was a benefit of $5 million or an effective rate of 32%.

Turning to the balance sheet. During the quarter, as a result of the operating loss and changes in working capital, we used $82 million in cash from operations. CapEx was $10 million for the quarter. Day sales outstanding, driven by the higher level of international revenue where we tend to see longer terms, was 81 days compared with 65 days in the prior quarter. Inventory turns were 4.1x compared with 5.9 at the end of the fourth quarter.

At end of the first quarter of 2011, inventory in terms of dollars was $190 million compared with $162 million at the end of the prior quarter. As I mentioned at the top of the call, inventory increased as the composition of revenue in the quarter differed from our expectations.

During the quarter, we returned about $7 million to shareholders via our quarterly cash dividend. The actual number of shares outstanding at quarter's end was about 363 million, consistent with the prior quarter. Headcount at the end of the quarter stood at approximately 3,350. And that's down about 50 from year end. Book-to-bill was below 1 for the quarter.

Turning to our outlook for the second quarter of this year. Based on orders in Q1, backlog and given the overall market conditions, we are guiding for a second quarter revenue to be up in the range between $325 million and $345 million. We expect gross margins to be flat with Q1, plus or minus 1 or 2 points based on product and customer mix.

We expect non-GAAP OpEx for the second quarter to be down slightly in the low $140 million. We expect the effect of expense and equity-based compensation in the second quarter will be about $8 million, split between operating expenses and cost of goods sold. In addition, we expect the second quarter non-GAAP tax rate to be about 32%.

Having said that, we'll now open the floor to your questions. Ginger, we're ready for the first question.

Question-and-Answer Session

Operator

Ladies and gentlemen, Your first question comes from the line of Rod Hall. [JPMorgan Chase]

Rod Hall - JP Morgan Chase & Co

I just got a couple. One is with regards to the, I guess, you said 2 percentage points of margin impact due to the higher warranty and obsolete inventory cost. Can you give us any more color on that? Like what's -- specifically on the warranty cost, I'm wondering whether there are particular products that you've had to warranty out or [indiscernible] than you expected to or can you just give us any kind of color on what's going on there? Secondly, on the margin, it looks to me like -- I mean you are shipping mix toward international revenues, can you talk to us about generally the structure of international margins? Are those -- do you expect those to continue to be lower than the North American margins over time, so we continue to see shift internationally, we should expect margins to be continue to be under pressure just from that mix change?

Timothy Wiggins

It's Tim. On the warranty cost, really, kind of 2 things going on. One is that over the last 18 months, we've been working out some structural changes to those programs that have allowed us to have lower-than-normal E&O and warranty expenses through 2009 and 2010. What we're seeing unfortunately in Q1 is those expenses are returning to kind of a what historically was more of a normal level, but it's happening at that time when we have much lower revenues. And so the combination of those 2 factors is resulting in this 2 points of margin swing that we talked about in Q1.

Robert Pullen

And then Rod, I'll answer your question about the international margins. In general, the international margins are under a little bit more pressure versus inside North America. But it's also reflecting of a greater mix of 7100 outside of North America. The optical market has a lot more pressure on it. But our 8800, 8600 and 9100, even outside of North America or in the international markets, do have higher than corporate average margins.

Rod Hall - JP Morgan Chase & Co

So Rob, if the 7100 were to -- if the other products were to accelerate, than the warranties outside North America would look more similar to North America, it wouldn't be that much different, is that what you're saying?

Robert Pullen

That's correct, Rod.

Rod Hall - JP Morgan Chase & Co

Okay and then, Tim, just on that warranty point, can you just remind us what exactly, what you guys were doing in the last couple of years to reduce warranty cost and what's, I guess, reversed back to normal now?

Timothy Wiggins

Sure. Well, we've looked at a number of structural changes, including outsourcing some of our warranty where we had fixed cost that were significantly lower. So as we made those transitions, we've been able to recognize either low expense or in some cases, credits. And Rod, you can see that in our 10-K where we show the annual balances of both these reserves. So what we've done as we made those structural changes that allowed us to, if you will, pick up some of those cost benefits. We've also seen a change in overall portfolio where our access business is running out where it had slightly different characteristics. So we've had just some positive experience there, but we're kind of at the end of the structural changes and back to a more normal accrual rate, at least on the...

Rod Hall - JP Morgan Chase & Co

Maybe one last thing for Rob. Rob, you guys flagged the weakness in the large North American customer again, any update on that? Can you gave us any kind of color update on what might be going on there and when you might expect stabilization if ever, I guess?

Robert Pullen

Well, for confidentiality reasons, I can't go into the specifics about it but what I can tell you is that the revenue was down in North America. It was largely 1 customer. And we believe that we actually, probably hit a bottom with them. But at the same time, our revenues and other customers inside of North America were up. And as I mentioned and Tim mentioned, revenues outside of North America were up 40%.

Operator

And your next question is from the line of Jim Suva. [Citigroup]

Jim Suva - Citigroup Inc

A question regarding your initiative to do a lot more focus with the mobile future and the increase in R&D. I think that's definitely a good decision. The question is, are we going to see a bit of a gap before we get to see those projects going? And if so, is that fully reflected in the June quarter guidance, or is that gap of the current strategy in product set compared to what the future growth focus in R&D is going, is that gap still yet to come? Because I did notice that the June quarter guidance while up quarter-over-quarter, looks like the midpoint of it is below historical. So I'm just trying to figure out, are we starting to approach that gap, or is that gap still yet to come later in this year and when we start to bridge that gap?

Timothy Wiggins

Jim, it's Tim. Yes, we're in the gap, as you can tell from the reversal of our operating income. So certainly, we're not in the position where we want to be but we see this significant opportunity for future growth. So I think what you're seeing here is something that is kind of a near-term equilibrium for the business. We're hoping that the back half of the business picks up in terms of volume that would allow some improvement in the financial results. But it's too early to tell.

Robert Pullen

And as I mentioned earlier, we've been investing both on enhancements on existing platforms and on new platforms. And some of those are going to hit the market this year as I mentioned earlier in my talk.

Operator

And your next question is from the line of Nikos Theodosopoulos. [UBS Investment Bank]

Nikos Theodosopoulos - UBS Investment Bank

Just a couple of quick follow-up questions. You mentioned, I think in the press release that your customer concentration of your top 2 customers was 25% in the quarter. Can you give us what those metrics were year-over-year or sequentially, if you have them?

Timothy Wiggins

Yes, I believe the number is 35%, Nikos.

Nikos Theodosopoulos - UBS Investment Bank

I'm sorry, 35% in the first quarter, what were they in the prior periods?

Timothy Wiggins

It was in about 55% or 56% for all last year. Tom will look that the number up. It's in that neighborhood. And the year before that, those 2 customers for the full year were up 52%, I believe. So it's down significantly, which would be reflected in our overall North American revenue that's down in the Q as well.

Nikos Theodosopoulos - UBS Investment Bank

And then, on the book-to-bill, you mentioned it was below 1. I mean can you give some -- can you give some additional color on that? I mean if it's fair to say that was U.S. driven, was the book-to-bill stronger internationally, and any color you can give on that?

Robert Pullen

Sure, yes Nikos, I'll do that. The book-to-bill was slightly under 1 overall, and it was slightly below 1 in North America and above 1 outside of North America.

Timothy Wiggins

I would add, Nikos, that we did see some improvement in the book-to-bill as the quarter progressed. So things picked up a bit.

Nikos Theodosopoulos - UBS Investment Bank

Just lastly, on the mix next quarter given the gross margin guidance, are we -- are you expecting, you were a little bit surprised on the geographical mix this quarter. Are we looking at a similar type of mix in the second quarter that's driving the gross margin, or do you see the North America snapping back to a higher percentage of sales? What's your perspective on that?

Robert Pullen

Well, we see a consistent mix between our international and North America mix, Nikos, first quarter versus second quarter. We were about 54% of our revenue was in North America in the first quarter, 46% outside of North America. And we would expect to see similar percentages in the second quarter. Our business internationally, as we've shared with all of you, we made a conscious decision to diversify and invest. And some of that is paying fruition right now.

Operator

And your next question comes from the line of Mark Sue. [RBC Capital Markets]

Mark Sue - RBC Capital Markets, LLC

The understanding behind the bottoming at your large North American customer, is that because they are now kind of at maintenance mode with their existing products? Or are the traditional products still declining at this customer but is now being offset with some of the new products?

Robert Pullen

First of all, the revenue forecast is reflected in our guidance, Mark. We do see a loss of share on the Mobile Backhaul at that particular customer. And we expect that to be in the maintenance mode with a fairly long tail.

Mark Sue - RBC Capital Markets, LLC

And then as you diversify and kind of invest in the additional growth products, should we sort of think of profits for the full year or maybe kind of breakeven or kind of sort of anything you can help us in terms of how you're doing your framework for your financial model this year?

Timothy Wiggins

Mark, It's Tim. Obviously, we don't provide full year guidance but I did mention earlier in the call that as we look in the second half of the year, we're hopeful that we'll see some volume pickup. And volume is an important component of what we're seeing here. So if that comes to fruition and maybe even some positive mix shifts, I would expect to see some improvement in terms of our overall financial results. But as I said earlier, too early to tell. But that's at least something that we're looking at internally.

Operator

And your next question is from the line of Michael Genovese. [MKM Partners]

Michael Genovese - MKM Partners LLC

I want to talk more about this $30 million sequential inventory build. It doesn't sound like that was driven by -- certainly by the second quarter guidance and expectations for sequential growth. So could you talk first of all, more about what that inventory is? Secondly, where, not just geographic mix but where the product mix, in the first quarter came in differently than you expected? And then thirdly, your confidence level that, that inventory will be sold through in the upcoming quarters?

Timothy Wiggins

Wow, those are some tough questions. Michael, from the highest level, when we start out the quarter, we have fairly long lead times and components. And so we have to make an educated guess, if you will, on what products are going to be sold. And as I've mentioned at the top of my comments that the mix was different geographically, and that also means product of mix differences. So what we're seeing here is that still some constraints in the supply chain that force us to make these bets. And that's what we did and when the mix comes out different, you end up with chasing other inventory that you want to make up for and you end up with stuff that you didn't plan on. We have a pretty good focus on that, our supply chain team is very effective at managing through these issues. So at this point, we'd expect that we'll continue to drive that down as the year progresses, and we should end the year with substantially lower balances. And at this point, we don't expect anything out of the ordinary in terms of being able to sell that inventory.

Operator

And your next question is from the line of Ehud Gelblum. [Morgan Stanley]

Ehud Gelblum - Morgan Stanley

Can you give us a sense, I'll move on from this but I just want to hit one last time on the North American customer, can you give us a sense as to what percent of your data revenue, that 107 is still -- that they kind of still represents? And then can you give us a sense as to what North America did outside of that North American customer?

Timothy Wiggins

I'll let Rob talk about the customers. But from a data standpoint, I think Rob mentioned, one of the things that was very encouraging in our first quarter results is that we saw record sales of the 8600. So Ehud, my hope is that, that product tends to be focused certainly outside North America in the EMEA region, and I'm hopeful that we'll be able to ride some of the smart phone penetration and volume increases there as we planted this equipment in a lot of customers, and so as they need to expand their networks, we'll ride with it. Rob also mentioned that we've added some new large customers with that platform. So overall, we're encouraged.

Ehud Gelblum - Morgan Stanley

Right, so that growth is -- the 8600 is international based, but as you look at North America outside of this large North American customer, is there anything else to get excited about in data?

Timothy Wiggins

I think we're trying to get over the 1 customer decline and there's certainly lots of things to be excited about. But that was a big proponent. If you looked at our disclosures over the last 6 quarters, you know how important that was to us.

Ehud Gelblum - Morgan Stanley

Absolutely.

Robert Pullen

And the big customer was in single digits of revenue for overall 8800 revenue from a global perspective, Ehud. And like Tim said, the 8600 had a record [indiscernible] quarter.

Ehud Gelblum - Morgan Stanley

Okay, we'll leave it at that. Let's turn to the OpEx side. How variable is your OpEx? It looks like it'll be down next quarter. Is that a result of the $50 million fewer headcount that you now have from year end? Or is that -- is there $3 million to $5 million, let's say, in play that you have each quarter from test systems and prototypes and other things that can kind of go up and down? I'm just trying to see as to in any given quarter, can you pin a $137 million, $138 million in OpEx? Or is it always going to be $142 million, one -- how does that go up and down? What is it based on?

Timothy Wiggins

Well, it's based on Rob looking me squarely in the eye and saying, "We need to manage these costs given our current results." So there's a lot of variability in our stand. I think Rob's pointed out that we made a conscious and sometimes painful decision to continue to make these investments in what we think is a very important future for us. But we're also putting pressure on the rest of the organization where if we can control costs, we will. So yes, there is some lumpiness to it, Ehud. But what we're trying to say is, look, we're paying attention to the business, we know we're not generating the kind of cash or the results that we want. But we also know that we have this gap in terms of where our revenues are and where we want them to be. And if we don't invest, we won't gain much. So I think we will continue to modulate that spend based on what we think we can afford and make the investments as best we can that will produce the future revenue for us.

Ehud Gelblum - Morgan Stanley

Personally, I think you should spend what you need to spend. So don't even take that as a comment on what you should do. You have the cash, you need to come up with product. I'm just wondering as to whether the R&D that we saw this quarter was headcount-induced to the point where it can't come off very easily, or if it was project-induced, so that can kind of move around and not necessarily...

Timothy Wiggins

I think R&D, if you think about it in the 4Q, 1Q, plus or minus, the variability, I think that's where it needs to be for the near term, on that kind of low $80 million range, give or take.

Ehud Gelblum - Morgan Stanley

Two other quick question, one on the gross margin range. It looks like we're now solidly in the 38% range like you said last quarter. You weren't really at 38%, you're more like a 42%. But if we look at those 2 points that you were talking about before, do they come back to you [indiscernible] back to 40% for going forward or I mean your guidance have now stayed sort of at 38%. But if you look at the trends as to where you're going, international is getting larger essentially as you go forward, even if North America somewhat has stabilized. But should we be looking at it long-term roughly a high 30s gross margin business or do we get back into the low 40s at some point and how do we do that?

Timothy Wiggins

No, I don't think you should think of us long-term as a high 30s. We're working on products that have future opportunities in margins that are significantly higher than our corporate average is 1; and 2, what we're really suffering in the short run is a huge volume problem. Of those margin declines from the 42%, most of it, if not all of it, is at the function of volume. So what we need to do is go to work on volume, 1, and hopefully we can see some improvements in the back half of the year; and 2, what can we need to do to knock some of those cost down? But when you think about it, the service margin number was largely volume related. And the other 3 items that we talked about, volume and the cost being absorbed, they're all volume related. So actually, our products margin sequentially, was up a little bit. But what we're suffering with is a substantially lower margin. So I think 40s are in our radar screen, if we can kick some volume up and push some of those cost down.

Robert Pullen

And Ehud, I alluded to it earlier, which is even our 8609, our new aggregation and access platform for Mobile Backhaul, it's not only a new platform to hopefully boost the top line, but it's a major cost reduction versus one of the products in our current 8600 family. And so we continue to be aggressive in trying to drive down cost. So while we guided flat in our margin, we do aspire to higher margin.

Ehud Gelblum - Morgan Stanley

Okay, great. I was going to ask who you're displacing at the new wins in Russia and how you're doing that. But I'll leave that and I'll let someone else to come in.

Robert Pullen

Well, it's the usual suspects, Ehud, it's the big guys.

Ehud Gelblum - Morgan Stanley

I was wondering on what basis, was it on price, was it on features, et cetera, but others can...

Robert Pullen

It was on the end-to-end solution, it was our functionality, all integrated end-to-end. All integrated under our network management system. And we have the right feature set for their 3G and their future 4G rollout.

Operator

And your next question is from the line of Todd Koffman. [Raymond James]

Todd Koffman - Raymond James & Associates, Inc.

I wanted to ask about the Transport segment. Given this kind of new lower level, is the older Digital Cross-Connect business now below 10%? Or could you give us some sense, how that older Digital Cross-Connect business and what make up it is of the total Transport segment today?

Timothy Wiggins

Well, it is more than 10% of our overall revenue, but it's significantly more than that of the Transport segment.

Todd Koffman - Raymond James & Associates, Inc.

And with regard to the Optical Transport revenue, which I guess was -- I think you called out down sequentially by a fair amount, it's actually down more than the Cross-Connect business sequentially, is the current configuration of the 7100 transport box still in a growth mode or is that dependent upon when you called out in your opening remarks, an enhancement to that to OTN switch, I think you said second half of 2011?

Robert Pullen

First of all, it is in a growth mode. Year-over-year, we do expect the 7100 system to grow, and we expect the new OTN switch to contribute to that growth.

Operator

And your next question is from the line of George Notter.

George Notter - Jefferies & Company, Inc.

I had a question about the competitive environment. If you look at your large customer, I believe most of that market share loss was around the 8800. And I guess the question here is, do you see any evidence that, that competitive issue that large customer is spilling over into other 8800 customers in other markets?

Robert Pullen

First of all, George, the impact here in North America was both the 8600 and the 8800. Next, yes, we continue to see global competition, fierce competition around the world. But as evidenced by our record 8600 quarter and our 40% year-over-year growth in international, we're winning more share there.

George Notter - Jefferies & Company, Inc.

Got it. Are there situations where you lost accounts almost to products -- to the competitor that appear at that large customer, or is it more confined again to AT&T?

Robert Pullen

We win more than we lose, and it's confined to North America.

Operator

And your next question is from the line of Alex Henderson. [Miller Tabak]

Alex Henderson - Miller Tabak + Co., LLC

I was hoping you can give us a little bit more granularity on what's going on in the Service business, it had been very stable over the course of 2010 and dropped to below 2010, 2009 quarterly levels. Can you talk a little bit about what's going on in that and why that would step down like that and whether you expect it to stay down at these lower levels or to rebound?

Robert Pullen

I'll take a shot on that. First of all, the Services revenue will be flat plus or minus 5% is currently where we're thinking year-over-year. It was largely driven by deployment services, and dominantly in North America. That's the reason it was down. And the deployment services, all the engineering, furnish and installation of our equipment.

Alex Henderson - Miller Tabak + Co., LLC

So it's tied to the program that was downsized essentially?

Robert Pullen

Yes.

Alex Henderson - Miller Tabak + Co., LLC

Second question, can you talk a little bit more about your ROADM products? I heard fairly strong commentary about demand for those products, yet the comments around optical seemed a lot more tepid than I was expecting. And can you talk about the directionality of your ROADMs, to what extent you're pushing increased directionality as part of the functionality?

Robert Pullen

Well, first of all, we gained 3 new customers in the 7100 this past quarter alone, spread geographically, 1 in North America, 1 in Europe and 1 in Asia. Next, I do expect the Optical revenue to be up year-over-year, and we are improving both the length of the wavelengths that we can handle, the number of wavelengths including the packet switching capabilities. Our next major drive is twofold, it's the continued growth of the packet technology on the 7100 platform all with the goal of saving router ports, or the expense on router ports, which we make, too, as well as the OTN switch. So granular OTN switching so you can have the current 8-degree ROADM we have today, switching in every direction within the network, either a hubbing point or a distribution point.

Alex Henderson - Miller Tabak + Co., LLC

On the raw material on the balance sheet, to the extent that the inventory build was generally described as involuntary, could you talk a little bit about whether that was true in raw materials as well?

Timothy Wiggins

Yes. And to the extent it comes from products like the 7100 that have lower margins, it tends to accumulate on my balance sheet much quicker, and so that was part of what happened in Q1.

Alex Henderson - Miller Tabak + Co., LLC

So that raw material isn't partly a reflection of the optical availability improving and the inventory correction that's going on in the optical component market?

Robert Pullen

It's at least correlated today.

Alex Henderson - Miller Tabak + Co., LLC

Finally, as we're looking out to the Services side, the Services margins came in pretty hard. Is that strictly a function of mix or is that a function of volume?

Timothy Wiggins

It's a volume thing, about 2/3 of those costs for deployment services are inside Tellabs, and 1/3 are variable on outside. And so if you end up with less volume, it's hard inside the quarter to react to that and make those changes. We'll continue to look at that over time, and we expect those margins to get back closer to the historic levels.

Alex Henderson - Miller Tabak + Co., LLC

Last question, I didn't see the headcount, I thought I heard reference of but I didn't see it.

Timothy Wiggins

3,350.

Alex Henderson - Miller Tabak + Co., LLC

3,350, thank you.

Operator

Your next question comes from the line of Jeff Kvaal. [Barclays Capital]

Jeffrey Kvaal - Barclays Capital

I'm wondering if you can talk a little about your source of profitability. You have indicated that the growth products remain sort of breakeven or below for you. I'm wondering both when that situation turns around and then, when overall the company, you both feel like you can be back in the black? And that may either be a timeframe or a revenue level or however, you would like to enter it.

Robert Pullen

Well, first of all, Jeff, some of our growth products are profitable, others are not. We need to increase volume. And as for your second question about when we're going to be in the black, our visibility is the current quarter, and you could see that we'll be on the edge here in this quarter. And hopefully, in the second half of the year, can show more progress.

Jeffrey Kvaal - Barclays Capital

Could you give us some window into what we gives you some hope for international pickup in the second half?

Robert Pullen

Well, as we mentioned earlier, our book-to-bill ratio is slightly above 1. Our demand for the 8600 was at its all-time high in revenue in the first quarter. Our International revenue was up 40% year-over-year and customers are giving us positive indications about some of our new product offerings that they're intrigued with them, 9100, 8600 extension, the 8609, 7100 and the OTN switch, and we've seen the 8800 even have some pickup in the Asia Pac region as well.

Operator

And your next question is from the line of Blair King. [Avondale Partners]

Blair King - Avondale Partners, LLC

I'll start just quickly back on the inventory subject. Just curious given the change in direction during the quarter versus planned, if you had missed any opportunities in the first quarter that might have slipped into the second quarter?

Timothy Wiggins

Some, but there's always a little bit of that, but it wasn't hugely profound.

Blair King - Avondale Partners, LLC

And then just going back to the 8609 comment, Rob, that you had made in your remarks and that it's in lab trials, and I think you have mentioned G&A second quarter or third quarter this year. If you could give any sort of indication as to what those lab trials or where those lab trials are in North America and international and if any of them are with Tier 1 carriers?

Robert Pullen

It's with Tier 1, they're in a mix of international and North America. And you're right, we're in trials right now and we should see availability, like I said, toward the end of the second quarter beginning of third quarter.

Blair King - Avondale Partners, LLC

This is just kind of a general question, you've mentioned a couple of times that a few of these products, including the 8609 are above corporate average gross margin. What are you using as a corporate average gross margin?

Robert Pullen

Unfortunately, the current gross margin that we delivered here in the quarter so, slightly above 38%.

Blair King - Avondale Partners, LLC

I just wanted to be clear on that. And then lastly, sort of along the same lines on the 9100, Rob, I guess you had mentioned that you had brought in 2 new customers this quarter and are in 15 trials. I think you had mentioned you were in over 20 trials last quarter. So obviously, you've closed, or at least think you'll close a few more than what you did this quarter but at any rate, are you on a revenue run rate that's sort of similar to what you had anticipated at $25 million or do you think that could exceed $25 million this year?

Robert Pullen

First of all, you're right about the 15 trials versus the 20. We converted a couple of them and are in pursuit of transition the others to revenue. We're not -- we don't give full year guidance on the product. But something -- plus or minus, $10 million of the $25 million is probably reasonable.

Operator

And your next question is from the line of Simona Jankowski. [Goldman Sachs]

Simona Jankowski - Goldman Sachs Group Inc.

Just a clarification first. I think you commented that you think you might have hit bottom with your large North America customer but you also commented that your book-to-bill was below 1 in North America. I just wanted to understand that dynamic there.

Robert Pullen

Well, first of all, we don't have great visibility in the individual customer at this point. So you have to -- we expect the second quarter to be slightly up versus the first quarter is really what I was articulating earlier. And the book-to-bill ratio was just slightly under 1. And as Tim mentioned, we did see our booking start to pick up for the end of the first quarter.

Simona Jankowski - Goldman Sachs Group Inc.

Got it. So the bookings then being lower than the billings, was that a reference to some of the other customers in North America?

Timothy Wiggins

It's a combination of all of them. And we also have a fair component of book and and ship in the quarter. So when we give you guidance, we're looking at both what's in the backlog and what our expectation is of orders are for the quarter. So we take all that into account when we give you the guidance.

Simona Jankowski - Goldman Sachs Group Inc.

The other question I had is on the comment about the growth products not being currently profitable, and obviously some of that is due to the lower volume and the higher investment. But can you just help us think about what should be the target operating models for those products in a scenario when the volumes are back? I just want to get a sense for their run rate profitability.

Robert Pullen

Well, the run rate profitability of the growth products is, as I mentioned earlier, is higher than our corporate average margin for the 8800, the 8600, the 9100. And it's below corporate average margin for the 7100 on a margin basis.

Simona Jankowski - Goldman Sachs Group Inc.

From an operating model perspective, because clearly, you're investing in R&D quite a bit in those, should we think of them, say, 2 or 3 years out, should we think of them as high single digit, low double digit, I mean what would be the target operating model there?

Timothy Wiggins

Well, we've got some very interesting products in the pipeline that are much more software oriented, and the margins tend to be significantly above, of course, our corporate average today but even above 50% margin where we've seen in the past. So if we can catch these products, and we think we can, they'd have double-digit operating margins in a steady-state basis.

Simona Jankowski - Goldman Sachs Group Inc.

And was that comment for some individual products within that portfolio or for the aggregate growth?

Timothy Wiggins

No, I'm talking about some of the higher products that are more software oriented. Of course we also have in the growth portfolio our Optical business which is much more competitive, and that would be a big challenge to get to double-digit operating margins, something in the single digit, maybe even the low single digit just given the nature of that business.

Simona Jankowski - Goldman Sachs Group Inc.

So it sounds like on a blended basis, for that portfolio, we should think about the goal maybe a couple years out, when volumes are hopefully back up as being right around the high single, low double-digit range?

Robert Pullen

I think that's probably a good aggregate mix.

Operator

And your next question is from the line of Simon Leopold. [Morgan Keegan]

Simon Leopold - Morgan Keegan & Company, Inc.

Just a couple of clarifications, if I might. I think you may have gone into some of this but I'm wondering if you would be able to provide us with sort of a rough apples-to-apples assessment of how much of the gross margin pressure is due to the domestic-international mix and then, how much is due to the lower volume?

Timothy Wiggins

Simon, most of it, if you look at our lock, quarterly lock, most of it is coming from volume in one way, shape or form between we had a volume issue in our service business this quarter, we had costs that are being absorbed over our lower base. I mean If you look at my margin lock, most of it's volume related. In fact, I mentioned earlier that if you look just strictly at our product mix between 4Q and 1Q, it actually improved in terms of margin. But it's being obscured by these costs, which are obviously related to our volume.

Simon Leopold - Morgan Keegan & Company, Inc.

So is it wrong to think that on an apples-to-apples basis, you're gross margin international versus domestic is lower?

Timothy Wiggins

Well, If you look at the historic businesses, they're similar. But what's happening is we're adding new business internationally particularly in the areas as Rob mentioned in the 7100, where it's very competitive. We've shown you some of that -- those numbers in North America when you're planting this iron into a multi -- hopefully, a decade-long opportunity, it's a very, very tight, and you have to get to the transponder cards and some of the business model works a little better there. So it's a mixed bag. Rob mentioned that the data products have good solid margins, the Optical business does not. So it's partly a function of 1, winning new customers, Simon, in International businesses as opposed to install base where it's more competitive, and then, it's also a function of the particular type and the customer maturity, of where early in the life cycle of just when the business is going to be more competitive; so the other thing I would add is that we're winning more new business internationally. So it puts us more into that new customer acquisition mode, which puts more margin pressure on it. So that's part of what you're seeing.

Simon Leopold - Morgan Keegan & Company, Inc.

And then touching on the Optical business, obviously was down sequentially, some of that seasonality, how did it compare on a year-over-year basis?

Timothy Wiggins

The business? For volume?

Simon Leopold - Morgan Keegan & Company, Inc.

Yes.

Timothy Wiggins

It was up.

Robert Pullen

It was up roughly 10%.

Simon Leopold - Morgan Keegan & Company, Inc.

Optical was up roughly 10% year-over-year?

Robert Pullen

Yes.

Timothy Wiggins

Yes.

Simon Leopold - Morgan Keegan & Company, Inc.

Rob, you talked about the analytics capabilities going up above layer 3, 4 through 7 capabilities. I just want to clarify, are those in the 9000 series products only or are you putting that into your 8800 platform? And what's the status of availability for those products? And where do you see that in terms of a contributor for the year?

Robert Pullen

First of all, the deep packet inspection capabilities are already in our 9100 SmartCore product. We also anticipate that we'll add that functionality to our next-generation platform that we're working on, which is a combined Mobile Backhaul and packet core. We're going to call it service core. I mentioned earlier, Simon, that we -- in with the DVI capability, we're in about 15 trials now. We do expect a revenue contribution for the LTE version of that product towards the end of this year, and the next generation platform some time next year.

Simon Leopold - Morgan Keegan & Company, Inc.

And is it limited, in terms of functionality to just DVI or there are other capabilities?

Robert Pullen

Oh, no, It's an entire packet core, that does WiMAX, 3G, GGSN and the Long Term Evolution in addition to the deep packet inspection.

Operator

And your next question comes from the line of Tal Liani. [BofA Merrill Lynch]

Tal Liani - BofA Merrill Lynch

Just a question on expenses, DSOs went up, if you don't mind to explain. And also, operating cash flow negative, what do you expect for the year? Do you think that the cash flow could turn positive again near term? Or is it a function of revenue growth, which means without revenue growth, it will stay negative?

Timothy Wiggins

We had a lot of changes. The first quarter is typically tough for us in terms of capital changes. So one, on the DSO, what you're seeing is as our mix shifts to international it's increasing where we tend to see internationally longer terms. On the cash flow, I'm hopeful that we'll go positive cash flow in Q2 and that we will be positive cash flow for the full year.

Operator

And your last question comes from James Basch [ph]

Unknown Analyst -

I'm wondering why you're not buying stock back more aggressively? I'm just guessing here, but I'm guessing you guys had offers not to be a stand-alone company that has -- didn't take those offers, I'm guessing. And the reason why is not really being reflected by your current execution. Until this quarter, you guys had strong operating cash flow generation, you didn't this quarter. Why not turn this business into something very soon that's immediately profitable cash-flow generating and buy back a significant amount of stock given how cheap it is? And given that you are likely given offers at much higher prices, if you think your business is worth whatever someone was willing to pay for it before, why not buy stock back aggressively now?

Timothy Wiggins

Thanks, for your question. Some, I probably can comment on and others I can't. What we've done over the last 5 years is we spent $1 billion of our free cash flow buying stock back. We did not have any free cash flow in the quarter, and that's the reason why we didn't buy the stock back. The business is in a transition and what we're doing is looking carefully at what are the future opportunities to create shareholder value, what are the needs for capital and in a period where we didn't have free cash flow, we didn't think it was prudent to buy the shares back. We'll continue to look at that on a quarterly basis going forward.

Unknown Analyst -

Why aren't you guys more committed to getting profitable? And I mean, with 38% gross margins, you should be much higher than breakeven profitability over the near term, why isn't that a near-term commitment?

Robert Pullen

Because we're investing for the long-term success of the business. I had just gotten done telling you that we're investing in next generation platforms in the mobile Internet for the long-term viability and success of Tellabs and our shareholders. It's unfortunately at the significant pain of short-term profitability. And as you can imagine and you're alluding to, we could turn the company more aggressively profitable, but it would minimize our long-term growth prospects.

Unknown Analyst -

And given the stock price under-performance versus your comps, how have you guys failed in your execution? I want to have a better understanding that there's realization that you guys have done a poor job executing, and I want a better understanding of what you're doing differently now to correct that.

Timothy Wiggins

James, why don't you give me a call off line. We're past time here. We'll be happy to discuss that with you in additional detail. Thanks for your question.

Robert Pullen

But I'll give you an answer and you can follow up with any detail. Look, we didn't execute as a big customer in North America. They selected the biggest vendors in the world to work in the domains and we needed a next generation platform that we didn't have yet that we're working on now, which is why we're investing for our future. We'll improve that over time.

With that, everyone, our time is up. And I'd like to thank everyone for the good questions and their participation. While we continue to invest for the long term, we're focused on this growth wave of the smart mobile Internet. And we recognize that and we wish that our performance was better and we'll continue to work on that for both our customers and our shareholders and our employees. So thanks a lot and we'll talk to you soon.

Operator

And ladies and gentlemen, this does conclude today's conference call. Thank you for participating. At this time, you may now disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Tellabs' CEO Discusses Q1 2011 Results - Earnings Call Transcript
This Transcript
All Transcripts