Tellabs Inc. fell to an almost 20-year low after forecasting first-quarter revenue that trailed analysts’ estimates and announcing a plan to discontinue its 9200 routing product and cut expenses.
The shares slid 7.7 percent to $2.11 at the close in New York, the lowest price since August 1993. The stock tumbled 44 percent last year, while the S&P Midcap Information Technology Sector Index advanced 15 percent.
Tellabs, which introduced the 9200 network-routing platform in 2011, said yesterday after the close that it will be discontinued this year. The cost reductions will include cutting 300 jobs, Chief Executive Officer Dan Kelly said today on a conference call. The Naperville, Illinois-based company has about 2,600 employees, according to its website.
“While it wasn’t yet generating revenue, we were previously modeling for $20 million in 2013 revenue for 9200,” George C. Notter, a Jefferies & Co. analyst, wrote in an investor note yesterday. Notter, who is based in San Francisco and rates the shares hold, said Tellabs’s first-quarter forecast was “disappointing.”
The decision on the 9200 followed a review last quarter of Tellabs’s products and cost structure, Kelly said in a statement yesterday. The company plans to “demonstrate new software-defined networking and self-optimizing networks capabilities at Mobile World Congress in February,” he said.
Tellabs forecast first-quarter revenue of $205 million to $220 million. The average analyst estimate was $238.9 million, according to data compiled by Bloomberg.