Gentleman-
What does Tellabs do? Now there is a basic question. we live at the base of the information age,where all sorts of voice,data, video,internet,info. etc. is to be gathered,sorted,transmitted,massaged, globally for our infernal pleasure and Tellabs makes some the best egt. To help us do this job, involving some of latest technology known to man,and because it's sitting on a $600 million nestegg with very little debt, Tellabs can sort through lots of the evolving companies and buy or create partnerships,with other leading edge cos. at will. Now Tellabs has some experienced leaders that provide the critical mgt team decisions that help Tellabs make this kind of progress.
Now boys I'm a aggie,and that's about as technical as l'm allowed to get. For a better understanding of Tellabs go backwards 5-10 years and read their annual reports.
Now to the business at hand, here is my short summary of the conference call,4/20/98.
Four of the mgt. Team were on,Pres.Mike,financial guru Peter,N. Amer pres, Brian and for the first time and holding his own was John Vaughn ,Inter. Pres.
Gross for quarter was 327 m.(Million),+33% from one year ago,Titan was 175M.+40%,Martis was 77 M. + 26%( off 8.5M.for currancy)and Echo 32M. +65%. Net income was 68M. + 38 % from actual earnings one year ago or only up 8 % from one year ago when you include the 20M profits then from sale of AFC stock. Now the important thing is that the analysts had them pegged at .35/share , so Tellabs beat that by 5.7%,and thus Tellabs jumped to 71 5/16 on 4/20/98. R and D held steady at 13.2% of gross.The summary by the mgt team said they were well positioned for 1998 year and very optimistic.The vote on CO. takeover will take place on May 12th with no sweat. Bell Atlantic contract was a major coup.The Helsinski Martis mfg. Plant is opening up,just in time. Optical networking projects with their various new products is coming nicely,keeping in mind that 1-3 years are needed from when they were started.
Cablespan Two will be the subject of announcements soon, with about 25M sales in '98.The emerging IP networks,have created a whole area to apply Martis solutions. Currency loss for '98 is expected to 17-18 M.due to strong dollar. Martis DSX will be in 410 M. gross for year,up 45-50% when viewed in Finnmarks.Titan upgrades now 65% of business with new business at 35 % of sales.Translation, our smart sales force works closely with our customers, gets them started with our products and as they get hooked they find themselves needing our upgrades,which are costly devils.Mgt. team is satisfied with W
DM progress as lead by our NY. Team, ook for some announcements in later part '98, this will be a significant growth area.with about 20M gross in 4th ¬ '98 and starting to take off in '99. Atm,gateway products will to ship in '98. Later in "98,look for announcements on bandwidth mgr products ,very important since bulk of industry is looking at total systems approaches.China is being cultivated with about 10M gross coming this year. Echo at 32M is 70% based in USA,so buying CO. will greatly expand our international sales. No sales of AFC shares this quarter, we hold 8-9% of company and have developed a new relationship with technological exchanges with this hummer. At Supercom show in 6 weeks, Tellabs will feature interoperability of our products,new Titan 2000 features and new Martis features and Co. Level 3 operators,eg.25 alternate service providers are a big source of our growth, as they use Tellabs technology to build their future.There are over 2000 long distance providers, who think they can provide better service than the old monopoly and they need the best egt. To try to do this. There is a aggressive schedule for launching new products in '98,including major enhancements to Titan 5500 and Martis products. Telmex selected Tellabs. John Vaughn new inter. Pres had good responses.
Boy's the mgt team is experienced,with plenty of cash, and they are playing lots of angles in playing with this fast growing international. Market,.that is changing rapidly
VERY IMPRESSIVE DAVE DICKERSON
I REMAIN A LONG TERM BULL. |
