Tellabs reported third-quarter diluted earnings per share of 1 cent and net income of $2 million before one-time items. One-time items in the third quarter included a $50 million restructuring charge announced in August, a gain of $6 million from the sale of stock and a writedown of $19 million in technology investments. Including one-time items, Tellabs reported a loss of $49 million or 12 cents per share. Tellabs made significant progress to lower its cost structure in the quarter, as it worked to align expenses with revenues. Operating expenses for the third quarter were $195 million, down 13% sequentially from the second quarter.

Customers continue to embrace Tellabs’ new optical products, as more than 10% of our sales this quarter were generated by new products, said Tellabs President and CEO Richard C. Notebaert. And we are encouraged to see greater stability in our U.S. customers’ recent order patterns.

Tellabs said that it does not have sufficient visibility to provide guidance for the fourth quarter of 2001.

Optical Networking Sales of optical networking increased sequentially to $233 million from the second quarter of 2001. Sales of new products, including the Tellabs TITAN 6000 series, rose to $47 million, or more than 10% of overall quarterly sales. Tellabs recently announced agreements with VoiceStream and Qwest for TITAN 5500 systems to optimize their networks.

Broadband Access Weaker European markets affected Tellabs and led to sequentially lower revenues in Tellabs’ broadband access segment. Third-quarter sales amounted to $122 million. Tellabs enhanced its MartisDXX platform to consolidate voice and data traffic in corporate networks and announced a distribution agreement with Nanjing Postel Telecommunications to sell FOCUS networking equipment in China.

Voice-Quality Enhancement Sales in the voice-quality enhancement market amounted to $36 million. Tellabs announced new voice-quality enhancement business with Verizon Wireless, BTCellnet and Nextel. The company also launched the new VERITY 3100S, the industry’s only digital broadband echo canceller that combines voice-quality enhancement and cross-connect functions into one system, eliminating the need for multiplexers and cutting costs by half.

SOURCE: COMPANY PRESS RELEASE