Tellabs returns loss in third quarter

Telecoms equipment maker Tellabs fell into the red in its third quarter as it slashed expenses and cut jobs amid reduced customer spending.

The Illinois-based company, which announced the closure of its plant in Drogheda, Co Louth with the loss of 204 jobs in August, saw its results, including one-time items, plunge to a loss of $49.47 million, or 12 US cents a diluted share, compared with a profit of $187.3 million, or 45 US cents a diluted share, last year.

Tellabs still employs about 500 people at its plant in Shannon.

One-time items included a $50 million restructuring charge announced in August, a gain of $6 million from the sale of stock and a write-down of $19 million in technology investments. Officials pointed to stability in orders, but nevertheless declined to provide any guidance for the fourth quarter. Analysts expect the company to earn five cents a share, with a range of nil to a profit of 10 cents, according to Thomson Financial/First Call.

Merrill Lynch analyst Mr Michael Ching credited the company for managing its operating expenses - they fell 13 per cent from the second quarter - but said many analysts were looking for sales in the range of $475 million.

Excluding charges, Tellabs's earnings fell to $2.4 million, or one cent a diluted share, from $196.26 million, or 47 cents a diluted share, last year.