Though many telecom equipment names have performed well lately thanks to good earnings reports and capex optimism, Tellabs (TLAB -7.7%) made new multi-year lows thanks to mixed Q4 results and guidance for Q1 revenue of $205M-$220M, below a $241.6M consensus. Gross margin is expected to fall to ~34% from Q4's 42.2%. Tellabs has been steadily losing share, and has also seen a CEO transition. The Data segment (switches/routers) saw a 48% Y/Y sales drop - in response, Tellabs says it's discontinuing its 9200 edge router, and will cut 300 jobs as a result. (transcript)
Though FQ4 results missed estimates and guidance for FQ1 revenue of $435M-$460M isn't favorable with a $458.6M consensus, Ciena (CIEN +1.8%) is trading higher. Few expected a great report in light of soft wireline capex, and a record backlog is going over well. Also, gross margin rose 290 bps Q/Q to 42.7%, and is expected to stay in the low-40s in FQ1. Optical transport sales (62% of total) saw a 2% Y/Y decline and optical switching fell 50%. But carrier Ethernet sales rose 66% and software/services 21%. TLAB +1.5%. FNSR +5.3%. OCLR +2%.
More on Tellabs (TLAB): Q3 beats on its EPS but comes up shy on the revenue side. Total sales were down 20% Y/Y, but losses narrowed as operating expenses fell 61%. The company unveiled another round of job cuts, which will affect around 200 employees (out of a total of 3,246 employees). As a result of severance costs, it will incur a Q4 restructuring charge of around $11M. It also issued downbeat Q4 guidance, now seeing revenue between $240M and $260M, below the $290M estimate projected by analysts. Shares -4.6% AH.