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Tellabs Inc. reported financial results for the third quarter of 2013, missing the Zacks Consensus Estimate. GAAP net loss in the reported quarter was $9.8 million or a loss of 3 cents per share compared with a net loss of $3.9 million or 1 cent per share in the prior-year quarter.

Quarterly adjusted (excluding special items) net loss per share of 1 cent fell below the Zacks Consensus Estimate of break-even. Third-quarter 2013 total revenue of $198.5 million was down 24.9% year over year and was also below the Zacks Consensus Estimate of $210 million.  

Quarterly gross margin was 37.2% compared with 39.2% in the year-ago quarter. Operating expenses, in the reported quarter, were $80 million against $105.7 million in the prior-year quarter.

During the first nine months of 2013, Tellabs consumed $7.6 million of cash from operations compared with $4.5 million of cash generated from operations in the prior-year period. Free cash flow, during the reported period, was negative $20.6 million compared with negative $12.3 million in the year-ago period. Tellabs exited third-quarter 2013 with $551.1 million of cash and marketable securities on its balance sheet compared with $604.4 million at the end of 2012. Tellabs’ balance sheet was debt free.

Optical Segment

The Optical segment generated revenues of $88.4 million, down 18.1% year over year. The segment’s profit was $14.6 million compared with $23.5 million in the year-ago quarter.

Data Segment

Total revenue generated by the Data segment was $44.1 million, down 33.4% year over year. The segment recorded a profit of $0.9 million against an operating income of $1.4 million in the prior-year quarter.

Access Segment

Total revenue of the Access segment came in at $20.6 million, down 51.3% year over year. The segment’s profit declined to $2.4 million from $11.1 million in the prior-year quarter.

Services Segment

Total revenue of the Service segment stood at $45.4 million, down 5.2% year over year. The segment’s profit fell to $16.5 million from $15.6 million in the prior-year quarter.

Geographic Distribution

In the third quarter of 2013, the North American region generated $105.1 million (53% of the total revenue) in revenues compared with $126.3 million in the prior-year quarter. The remaining $93.4 million (47% of total revenue) was derived from the rest of the world, as against $138.1 million recorded in the year-ago quarter.

Other Stock to Consider

Tellabs currently has a Zacks Rank #3 (Hold). Other stocks in this segment, which are worth considering, include ShoreTel, Inc. (SHOR - Snapshot Report), Harris Corp. (HRS - Analyst Report) and Motorola Solutions Inc. (MSI - Analyst Report). ShoreTel currently has a Zacks Rank #1 (Strong Buy) while both Harris and Motorola Solutions have a Zacks Rank #2 (Buy).
 

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