Tellabs to up restructuring charges
Tellabs Inc. upped its previous estimate of second- quarter restructuring and other charges to $262 million. In April, the company quoted charges in the $150 million to $225 million range.
The charges include $93 million from Tellabs' exit from the Salix switching business, including $34 million in an inventory writeoff. Another $40 million went to consolidating facilities; employee-related costs and fixed asset charges; and $129 million in inventory charges, include a $46 million reserve for excess purchase commitments.
Most of the inventory charge is connected to its Cablespan products.
Tellabs also was one of four telecom companies whose stock fell Wednesday after Morgan Stanley Dean Witter reduced its outlook from outperform to neutral, Associated Press reports. Other companies were JDS Uniphase, Sycamore Networks and Nortel Networks.
Tellabs' shares fell 9.2 percent to $33.93 each yesterday.
Tellabs announced the restructuring charges in its first-quarter results on April 18, when it also announced it would eliminate 450 temporary and contract positions and not fill another 1,100 open ones.