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Tellabs again lowers estimates

The company slashes first-quarter targets for the second time, joining the long list of telecom equipment makers warning of slower-than-expected sales.

    Tellabs slashed its first-quarter targets for the second time, joining the long list of telecom equipment makers warning of slower-than-expected sales.

    The company now expects revenue to be more than $100 million less than it originally projected. In the troubled telecom equipment sector, companies including Cisco Systems, Nortel Networks and, most recently, Sycamore Networks and Extreme Networks have warned that revenue will be lower than expectations.

    Tellabs, like its competitors, makes equipment to transmit data, video and voice signals, and sells mostly to phone companies, cable operators and government agencies.

    The company's shares sank $5.19, or 12.74 percent, to $35.56 in morning trading.

    Tellabs now projects first-quarter revenue of about $772 million, compared with prior expectations for revenue of $830 million to $865 million. Earnings are expected to be 29 cents a share, compared with prior estimates of 35 cents to 38 cents.

    First Call had been expecting revenue of $844 million and earnings of 36 cents a share. Those projections were already lowered after the company's first warning. Original estimates had been for revenue of $876 million and earnings of 38 cents.

    The company blamed its second revision on reduced and deferred spending by major communications carriers late in the quarter.

    "The good news is, orders weren't cancelled," they were pushed out into the next quarter, Tellabs CEO Richard Notebaert said in a Friday morning conference call with analysts.

    Analysts were anxious to know whether the latest first-quarter troubles would affect the second quarter. CFO Joan Ryan said Tellabs was evaluating that and would give projections for the next full year and quarter when it reports its official first-quarter results on April 18.