Tellabs hits fourth quarter targets

Telecom equipment company Tellabs (Nasdaq: TLAB) met analyst earnings estimates for its fourth quarter on Tuesday and posted strong revenue growth despite fears of a slowdown. The company also gave a positive outlook for 2001.

For the quarter ended Dec. 29, the company posted earnings, excluding charges, of $232 million, or 56 cents per diluted share, up from $165 million or 39 cents per share last year. The earnings for the quarter were in line with First Call Corp.'s analyst consensus estimate.

Shares of the Lisle, Ill.-based company rose 2.49 to 55.99 in pre-session trading on the Island ECN electronic trading network.

Revenues for the quarter were also strong, with sales of $1 billion, up from $716 million last year. The Street had been looking for $988 million for the period.

Including one-time items, fourth-quarter net income was $238 million and diluted earnings per share were 57 cents.

The company reported strong sales in its optical networking business, which rose 49 percent to $641 million in the fourth quarter from a year earlier.

Broadband access products sales rose 33 percent to $238 million. The company said its managed digital network product line showed solid growth, which offset slower growth in the cable telephony business.

Tellabs switching product group reported quarterly sales of $40 million, down from $66 million a year ago.

On a conference call, company officials were bullish on the outlook for 2001. Continued strong demand in optical networking, including contractual commitments from Sprint, along with opportunities in global markets bode well for the upcoming year, the company said.

For full year 2001, the company said it is on track to meet estimates, with growth in optical networking pegged in the mid- to high 30 percent range. Earnings are projected to increase 30 percent, in line with First Call's $2.17 full year figure.

For the upcoming quarter, officials said the company is on track to meet earnings and revenue targets.

Due to the ramp up of new products, the company said that gross margins will decline year-over-year for fiscal 2001 and slip sequentially in the first quarter.

For fiscal 2000, excluding charges, the company earned $699 million, or $1.67 per diluted share, also in line with analyst forecasts. Net Income was up 33 percent from the $526 million, or $1.26 per diluted share, seen in fiscal 1999.

Full year revenue increased to $3.3 billion, a 43 percent increase over 1999 but slightly short of First Call's estimate of $3.4 billion.