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Tellabs up as company resumes buybacks

Tue, 08/11/2009 - 8:05am
The Associated Press

NEW YORK (AP) – Shares of Tellabs Inc. jumped Tuesday after the telecom equipment maker said it plans to buy back up to $200 million of its shares.

The company said Monday this represents about 8.6 percent of its shares as of Aug. 10.

The resumption of buybacks follows a "significant curtailment of stock repurchases since the fourth quarter of 2008, as the company evaluated uses of cash," Tellabs said.

Separately, Chairman Michael J. Birck plans to sell up to 3 million shares of Tellabs stock on the open market. Birck beneficially owns about 34.9 million shares and plans to use the proceeds from the sale to repay debt related to a family partnership.

Stock buybacks can increase companies' earnings per share because they result in fewer outstanding shares.

Lawrence M. Harris, an analyst with CL King & Associates, raised his 2010 earnings per share estimates to 30 cents from 28 cents. Analysts polled by Thomson Reuters expect a profit of 27 cents per share.

"Even after the $200 [million] share repurchase, Tellabs will still have a highly robust balance sheet," Harris wrote. He kept a "Neutral" rating.

Shares of Naperville, Ill.-based Tellabs reached a 52-week high of $6.38 in morning trading.

More Broadband Direct 08/11/09:
•  Abrakadabra at Keystone
•  OpenTV, Jinni team up to cut through search clutter
•  Verizon cuts bundle prices for small businesses
•  Rooney joins BigBand as SVP of worldwide sales
•  Huawei snags WiMAX deal with Clearwire
•  Broadcom's 175 Mbps MoCA-certified
•  Incognito now supports Teknovus' EPON platform
•  AboveNet gets MEF certification for 10GigE
•  Tellabs up as company resumes buybacks
•  Broadband Briefs for 08/11/09
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