A telco spending squeeze is pinching Tellabs ( TLAB) and some of its gear peers. The Naperville, Ill., networking-equipment maker blamed industry consolidation for a large part of the sales shortfall -- an increasingly common theme as suppliers report their year-end results. On Tuesday, Tellabs posted fourth-quarter adjusted earnings of $47 million, or 10 cents a share. That beat analysts' estimates by a penny, according to Reuters Research. But sales for the quarter dropped 13% from a year ago to $455 million. Analysts had been looking for revenue of $464 million in the quarter. Earlier Tuesday, Alcatel-Lucent ( ALU) reported disappointing fourth-quarter results. Sales came in at $5.02 billion, far short of the $5.33 billion Thomson Financial target. And late Monday, Adtran ( ADTN) reported that its top line was $109.9 million, slightly below the $111 million the Street was looking for. Tellabs says the fourth quarter was "difficult" due to the pause in spending during the merger between AT&T ( T) and BellSouth. Sales to AT&T, BellSouth and wireless unit Cingular were about $80 million below the year-ago levels, executives said on a conference call. Looking ahead, Tellabs says it expects sales of between $445 million and $455 million. Analysts had expected first-quarter sales of about $500 million. Early Tuesday, Alcatel-Lucent dropped $1.43 to $12.76 and Adtran slid 7 cents to $22.28. Tellabs rose 13 cents to $10.15.
Even though AT&T tried a last-minute bribe of promising 5,000 new U.S. jobs to help gain support for the deal, the Justice Department filed a complaint to fight the combination of the nation's No. 2 and No. 4 wireless carriers.