Telecom equipment maker Tellabs Inc. (TLAB) on Tuesday reported $408 million in revenue for 2008’s fourth quarter; the numbers fell slightly below Wall Street estimates of $410 million and came in 13 percent below the same period a year earlier.
Net income, however, was up thanks to cost cuts such as layoffs and a tax benefit. Tellabs earned $128 million, or 3 cents per share, compared to $6.3 million, or 1 cent per share, in the third quarter of 2007.
The Napierville, Ill.-based company said first-quarter 2009 earnings will be $345 million to $375 million, as telecom operators such as AT&T Inc. (T) and Verizon Communications Inc. (VZ) slow spending.
Analysts for investment bank UBS said Tellabs generated $1 million in cash from operations, but also burned through $16 million in free cash flow during the fourth quarter. Still, UBS is maintaining its “buy” rating on Tellabs stock.
“We believe the company may continue to win market share leveraging its balance sheet versus competitors in this tough environment,” wrote analyst Nikos Theodosopoulos in a Jan. 27 memo to clients.
