I recall from day one of the merger announcement the cautionary statements by Birck that the merger would be slightly dilutive; there is nothing new there.
Exactly. Birck confirmed in the cc his prior guidance that dilution could range from 4 to 8 cents. The NYTimes referred to 8 cents:
"But compare Tellabs' quarter ending April 3 with Ciena's second quarter, ending April 30 -- periods with more than 60 days in common. Suddenly, the combined numbers don't look so good. Tellabs still has its 37 cents, but Ciena's earnings per share drop to 29 cents, meaning that combining the companies would dilute earnings for Tellabs holders." [Of course, these are quarters that won't be included in the combined entity...and Birck had noted that July, a month that will be included in TLAB Q3, was the "best of the bunch" for the past 3 Cien-months.]
The cc will be gone by sometime on Tuesday. Once again, I'd urge everyone to listen to the entire thing. 800-753-9756. I don't think you can come away from that call without concluding that this is a done deal and, what is more, that Cienas' DWDM technology is an excellent selling opportunity for TLAB going forward, hence, a good engine for price appreciation from the current level.
Gary Korn |
