Tellabs Remains Neutral

RELATED QUOTES

SymbolPriceChange
T41.45+0.45
JNPR27.43+0.01
ERIC5.87+0.05

We reiterate our long-term Neutral recommendation on Tellabs Inc. (TLAB) following mixed financial results of the company’s fourth quarter of 2012. While earnings per share came slightly ahead of the Zacks Consensus Estimate, revenue fell short of the same.

Why Remains Neutral

A continuous fluctuation in Tellabs’ top line is the major problem for the company. In the reported quarter, sales declined year-over-year in all the four reporting segments. Tellabs’ high-margin digital cross-connect products are gradually showing a downtrend. Nevertheless, management has taken several strategic decisions to restructure Tellabs’ business model emphasizing the mobile Internet sector and its Insight Analytics Services.Meanwhile, the stock price of Tellabs declined 50% in the last year and is currently trading at the low-end of its 52-week price range. We believe this low-level of valuation may act as a cushion for further downslide of the stock price. Tellabs currently has a Zacks Rank #3 (Hold).

Risk – Reward Virtually Balanced 

Tellabs is facing serious problems in its core wireless backhaul solutions segment. AT&T Inc. (T) was the major customer for its 8800 multi-service router. AT&T decided to upgrade its network with pure Ethernet solutions since it is aggressively deploying 4G LTE networks and thus shifted to other vendors. AT&T historically generated 35% of Tellabs’ total sales and 40% of Data product revenue. Loss of business to AT&T had a significant adverse effect on Tellabs. Comparing year over year, Data product revenue shrank 48% in the fourth quarter. AT&T currently has a Zacks Rank #3 (Hold).

However, Tellabs is trying hard to expand is global reach to make up for losses incurred from AT&T. During 2012, Tellabs won a series of new contracts. The company added 18 new Tellabs 8600 and 8800 customers. These products are used for mobile backhaul solutions. Tellabs won 19 new optical customers. The company already offers 10 Gbps, 40 Gbps and 100 Gbps Ethernet switches. Currently, its product pipeline contains a 400 Gbps switch. Additionally, the company won 10 new customers in 2012 for its Access products.

Other Stocks to Consider

Other stocks to consider in the telecom network infrastructure segment are LM Ericsson (ERIC)) and Juniper Networks Inc. (JNPR). Ericsson currently has a Zacks Rank #1 (Strong Buy) whereas Juniper carries a Zack Rank #2 (Buy).

Read the Full Research Report on T

Read the Full Research Report on TLAB

Read the Full Research Report on JNPR

Read the Full Research Report on ERIC

Zacks Investment Research



More From Zacks.com

--

Get stories like this on the Yahoo app and discover more every day.
Download it now.
Loading...
  • Who's who in the Syria conflict
    Who's who in the Syria conflict AFP News - 35 minutes ago

    Talks aimed at ending Syria's nearly six-year war are set to open on Monday in the Kazakh capital, brokered by regime allies Russia and Iran and rebel backer Turkey. Key regime backer Russia began an air campaign in support of President Bashar … More »

  • Years of failed efforts to end Syrian conflict
    Years of failed efforts to end Syrian conflict AFP News - 46 minutes ago

    Since the start of Syria's war in 2011, several diplomatic initiatives have stumbled over the future of President Bashar al-Assad. Here is a recap: - End of Arab solutions - In January 2012, two months after an initial bid to end the violence, … More »

  • US stocks rise, dollar falls as Trump era begins
    US stocks rise, dollar falls as Trump era begins AFP News - 1 hour 3 minutes ago

    US stocks rose and the dollar fell Friday as Donald Trump was officially sworn in as the president of the United States and Barack Obama's term ended. Trump's inauguration dominated a day that saw most major equity markets rise as the … More »

  • Sales Lower but resilient Business Times - 1 hour 17 minutes ago

    CYBERJAYA: The Malaysian automotive industry is resilient, considering there were no “surprises” by the industry players last year, despite lower sales figures, according to Malaysia Automotive Institute (MAI) chief. Chief executive officer Datuk … More »

  • Top gainer: UMW Holdings shares soar Business Times - 1 hour 17 minutes ago

    KUALA LUMPUR: UMW Holdings Bhd soared almost 10 per cent yesterday, while its subsidiary UMW Oil & Gas Corp Bhd (UMW O&G) plunged more than 17 per cent, following the announcement of their consolidation plans. UMW Holdings was Bursa Malaysia’s top … More »

  • Trump's inauguration day of ritual upends tradition
    Trump's inauguration day of ritual upends tradition AFP News - 1 hour 49 minutes ago

    Donald Trump awoke as your everyday American billionaire. By noon he was sworn in as the nation's 45th president, on a whirlwind day that saw him thrust into the spotlight like never before. Trump, 70, began his Inauguration Day as many American … More »

  • Trump signs executive order against Obamacare health law
    Trump signs executive order against Obamacare health law AFP News - 2 hours 32 minutes ago

    President Donald Trump signed an executive order aimed at limiting the "burden" of the Obamacare health law that the incoming US leader has vowed to repeal. During the signing in the Oval Office, Trump's chief of staff Reince Priebus described the … More »

  • Singaporean buyer scores a bargain at St Regis Residences
    Singaporean buyer scores a bargain at St Regis Residences The Edge Property - 3 hours ago

    One of the first few resale transactions in 2017 resulted in a hefty loss for the seller. On Jan 3, a high-floor unit at St Regis Residences Singapore was sold at a loss of $2.3 million. The seller bought the unit in a sub-sale transaction in 2008 … More »

  • US stocks rise, dollar falls as Trump era begins Business Times - 4 hours ago

    NEW YORK: US stocks rose and the dollar fell Friday as Donald Trump was officially sworn in as the president of the United States and Barack Obama’s term ended. Trump’s inauguration dominated a day that saw most major equity markets rise as the … More »

  • US stocks rise, dollar falls as Trump era begins AFP - 4 hours ago

    US stocks rose and the dollar fell Friday as Donald Trump was officially sworn in as the president of the United States and Barack Obama's term ended. Trump's inauguration dominated a day that saw most ... … More »

  • Trump gets Obama's house, title _ even his Twitter handle
    Trump gets Obama's house, title _ even his Twitter handle Associated Press - 5 hours ago

    Donald Trump built his campaign on early morning tweet storms and hashtag-worthy slogans. Now president, he's in control of the White House's powerful social media arsenal, including the official @POTUS ... … More »

  • Business Highlights Associated Press - 5 hours ago

    ___ China's growth in 2016 slumps as Trump trade struggle looms China's economic growth sank to a three-decade low in 2016 as its struggling exporters brace for a possible trade battle with President-elect ... … More »

  • Stocks edge higher, snapping a 5-day losing streak for Dow
    Stocks edge higher, snapping a 5-day losing streak for Dow Associated Press - 5 hours ago

    Materials companies led U.S. stocks modestly higher Friday, recouping much of the market's loss from a day earlier and snapping a 5-day losing streak for the Dow Jones industrial average. Another crop ... … More »

  • How major US stock market indexes fared on Friday Associated Press - 6 hours ago

    Stocks closed modestly higher Friday, recouping much of the market's loss from a day earlier. The gains, which snapped a 5-day losing streak for the Dow Jones industrial average, came against the backdrop ... … More »

  • Gambia's Jammeh agrees to go, but exile terms not reached
    Gambia's Jammeh agrees to go, but exile terms not reached AFP News - 6 hours ago

    Gambia's Yahya Jammeh agreed "in principle" to hand over power to President Adama Barrow on Friday, Mauritanian and Guinean sources said, but differences remained before a full deal could be reached. Mauritania's President Mohamed Ould Abdel Aziz … More »

  • Dollar falls, U.S. stocks end higher after Trump inauguration
    Dollar falls, U.S. stocks end higher after Trump inauguration Reuters - 6 hours ago

    The dollar ended down while U.S. stock indexes rose in the last day of a choppy trading week, as investors reacted to President Donald Trump's inaugural speech. U.S. stocks started the day higher but gave up some gains after Trump started speaking. … More »

  • TrailStone buys Cargill's power and gas group - sources
    TrailStone buys Cargill's power and gas group - sources Reuters - 6 hours ago

    Commodities trader and investor TrailStone Group has purchased Cargill Inc's gas and power trading group, three sources familiar with the deal said this week. The move, first reported by Sparkspread, comes amid a reshuffling in the power and … More »

  • Dollar falls as investors unpack inauguration speech
    Dollar falls as investors unpack inauguration speech Reuters - 6 hours ago

    The dollar edged down on Friday as investors were underwhelmed by the limited scope of executive actions and the lack of concrete policy reforms in the inauguration speech of newly sworn-in U.S. President Donald Trump. Investors had been looking to … More »

  • Oil prices jump 2 percent ahead of producers' compliance meeting
    Oil prices jump 2 percent ahead of producers' compliance meeting Reuters - 6 hours ago

    Oil prices rose more than 2 percent on Friday on expectations that this weekend's meeting of the world's top oil producers would demonstrate compliance to a global output cut deal, but rising U.S. drilling activity limited gains. Members of the … More »

  • Mars investigating Skittles said to be intended for cattle Associated Press - 6 hours ago

    A mysterious Skittles spill on a rural highway in Wisconsin is taking another twist, with Mars Inc. saying it doesn't know why the discarded candy might have been headed to become cattle feed. The case ... … More »

  • US stocks close higher as Trump takes office AFP - 7 hours ago

    Wall Street stocks finished higher Friday as Donald Trump was sworn in as the 45th president of the United States and Barack Obama's term ended. US stocks were in positive territory virtually the entire ... … More »

  • Markets Right Now: Dow industrials break 5-day losing streak Associated Press - 7 hours ago

    The latest on developments in financial markets (All times local): 4:00 p.m. Stocks are ending higher, recouping much of the market's loss from a day earlier and breaking a 5-day losing streak for the ... … More »

  • Haven Assets in Demand as Forceful Trump Sworn In: Markets Wrap Bloomberg - 7 hours ago

    The S&P 500 Index’s advance was cut by about three-quarters as Trump addressed the country for the first time as president. The Bloomberg Dollar Spot Index fell. The S&P 500 Index advanced 0.3 percent to 2,270.48 at 4 p.m. in New York. … More »

  • Oil prices jump 2 percent ahead of producers' compliance meeting
    Oil prices jump 2 percent ahead of producers' compliance meeting Reuters - 7 hours ago

    Oil prices rose more than 2 percent on Friday on expectations that this weekend's meeting of the world's top oil producers would demonstrate compliance to a global output cut deal, but rising U.S. drilling activity limited gains. Members of the … More »

  • Apple is suing one of its most important suppliers
    Apple is suing one of its most important suppliers Business Insider - 7 hours ago

    AP Apple is suing Qualcomm, Bloomberg reported on … Continued The post Apple is suing one of its most important suppliers appeared first on Business Insider. … More »

 
Recent Quotes
Symbol Price Change % Chg 
Your most recently viewed tickers will automatically show up here if you type a ticker in the "Enter symbol/company" at the bottom of this module.
You need to enable your browser cookies to view your most recent quotes.
 
Sign-in to view quotes in your portfolios.

MARKET MOVERS

  • Most Actives
    Most Actives
    NamePriceChange% Chg
    0.172-0.002-1.15%
    N21.SI
    0.109+0.003+2.83%
    AAJ.SI
    0.121+0.006+5.22%
    40F.SI
    3.81+0.03+0.79%
    Z74.SI
    0.855-0.005-0.58%
    Y92.SI
  • % Gainers
    % Gainers
    NamePriceChange% Chg
    0.45+0.12+36.36%
    MR8.SI
    0.44+0.09+25.71%
    AWC.SI
    0.46+0.08+21.05%
    AYB.SI
    0.52+0.07+16.85%
    E8Z.SI
    0.20+0.02+10.50%
    BDN.SI
  • % Losers
    % Losers
    NamePriceChange% Chg
    0.22-0.03-13.73%
    AWI.SI
    0.155-0.015-8.82%
    F86.SI
    0.113-0.010-8.13%
    D79.SI
    0.23-0.02-8.00%
    T18.SI
    0.139-0.011-7.33%
    5NF.SI

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    1.4246-0.0012-0.09%
    USDSGD=X
    1.5220+0.0019+0.12%
    EURSGD=X
    1.7591+0.0004+0.02%
    GBPSGD=X
    80.1670-0.478-0.59%
    SGDJPY=X
    5.4390+0.002+0.04%
    SGDHKD=X
    3.1179-0.0011-0.04%
    SGDMYR=X
    9,436.7451+30.9307+0.33%
    SGDIDR=X
    4.8209+0.004+0.08%
    SGDCNY=X
    1.0759-0.0017-0.16%
    AUDSGD=X
  • Commodities
    Commodities
    NamePriceChange% Chg
    1,210.20+8.70+0.72%
    GCG17.CMX
    17.11+0.11+0.66%
    SIH17.CMX
    88.68+1.12+1.28%
    ^XAU
    2.620.00+0.19%
    HGH17.CMX
    52.33+0.96+1.87%
    CLG17.NYM
  • Bonds
    Bonds
    TreasuryYield (%)Yield Change
    1.94-0.01
    ^FVX
    2.47+0.01
    ^TNX
    3.05+0.01
    ^TYX