Tellabs second-quarter revenue beats estimates thanks to optical system sales

Optical transport, data, and access equipment vendor Tellabs reported revenue of $212 million for the second quarter of its fiscal 2013, slightly above the midpoint of its earlier guidance. The number squeaked past analysts’ estimates of $210 million, but fell well short of the $288 million Tellabs garnered in the same quarter of 2012. Sales of optical transport equipment, such as the Tellabs 7100 and 7300, accounted for more than half of the quarter’s total.

Optical transport, data, and access equipment vendor Tellabs reported revenue of $212 million for the second quarter of its fiscal 2013, slightly above the midpoint of its earlier guidance. The number squeaked past analysts’ estimates of $210 million, but fell well short of the $288 million Tellabs garnered in the same quarter of 2012. Sales of optical transport equipment, such as the Tellabs 7100 and 7300, accounted for more than half of the quarter’s total.

Not surprisingly, Tellabs reported a greater GAAP loss for the quarter than the year-ago quarter as well. The company says it suffered a net loss of $8 million ($0.02 per share) versus a net loss of $5 million ($0.01 per share) in 2Q12. On a non-GAAP basis, Tellabs saw a net loss of $1 million (zero per share) this year versus net earnings of $6 million ($0.02 per share) in the year ago quarter. The non-GAAP results exclude pretax charges of $4 million this year, compared with $7 million last year.

GAAP gross profit margin was 37.8% for the recently concluded quarter of 2013, better than the 39.6% of 2Q12. Decreased expenses accounted for the improvement. Non-GAAP, Tellabs saw a gross profit margin of 38.0% in 2Q13, slightly off the 39.9% of the year-ago quarter.

Optical systems sales came in at $113 million, up 21% sequentially. Sales of the 7100 and 7300 set a second quarter sales record, President and CEO Daniel P. Kelly told participants in an analyst call August 2. Worldwide sales of 100G modules ramped well during the quarter, he added. Customers for metro 100G during the quarter included CenturyLink and Vtesse in the UK. The company also is working to expand into OTN switching, with Kelly saying during the Q&A portion of the call that Tellabs has tested its capabilities with customers.

Revenue from data system sales was $36 million, access segment revenue was $19 million (down $20 million sequentially, due to shrinkage in sales of the Tellabs 1600 single-family ONTs), and services segment revenue was $44 million. The access revenues included shipments of the company’s new 100 series of mini ONTs. Meanwhile, Kelly revealed the company is developing a new product aimed at small cell backhaul. It also is working on applying software defined networking (SDN) principals to mobile backhaul. To this end, Kelly reported “several active customer engagements” with lab trials expected this year. The company will add the SDN capabilities to the Tellabs 8000 Intelligent Network Manager as well as the Tellabs 8600 and Tellabs 7100 products early in 2014, he said.

Looking forward, management forecasts third-quarter 2013 revenue will range from $200 million to $220 million, which is the same guidance it gave for the recently concluded quarter. Non-GAAP gross margin should come in at 37%, “plus or minus a point or two.”

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