Updated from 9:41 a.m. EDT

Shares of

Tellabs

(TLAB)

recovered slightly Thursday after plunging as much as 26% in pre-market trading on an earnings warning issued by the company late Wednesday.

The telecommunications equipment maker fell 1, or 2%, to 60 in midday trading. (Tellabs closed down 2 7/8, or 5%, at 58 1/8).

The company said it expects first-quarter net earnings to be lower than estimated, at 25 cents to 27 cents, excluding one-time gains and charges, because of lower gross profit margins. That's 3 cents to 5 cents lower than the consensus estimate of analysts polled by

First Call/Thomson Financial

.

The lower margins were due to a number of factors, including higher-than-anticipated costs for some components used in the Lisle, Ill.-based company's products and a shift in product mix to lower gross profit margin products, such as the Cablespan telephone distribution system and higher customer service installations.

On the positive side, management said it should meet the current full-year consensus estimate of $1.66. Additionally, revenue for the first quarter should be higher than expected, at about $630 million.

Tellabs will announce its first-quarter results on April 18 before the markets open.