WASHINGTON (Dow Jones) -- Tellabs on Tuesday named longtime insider Robert W. Pullen its new chief executive, the latest effort to stop the telecommunications-equipment maker's recent slide.
Pullen, 43, replaces Krish A. Prabhu, who announced in November he would resign. Analysts say Tellabs wanted a No. 1 executive with more operational experience.
Naperville, Ill.-based Tellabs, a key supplier for large U.S. phone companies such as AT&T and Verizon Communications, develops equipment used to manage network capacity and direct communications traffic.
Shares of Tellabs were down 7 cents at $6.83 in morning trading after Pullen's appointment.
Pullen has worked at Tellabs for 23 years in a variety of roles, including sales and product development. Before his promotion he served as vice president and general manager of global services
"Rob is the right person to lead Tellabs through these exciting and challenging times," co-founder Michael J. Birck, who will remain chairman, said in a statement. "He brings the experience and knowledge that Tellabs needs to execute on our plan to improve performance."
Revenue at Tellabs initially doubled under Prabhu's watch after he took over in 2004, but growth has weakened considerably over the past year. The vendor has also been the subject of persistent takeover talk.
Yet phone companies have grown cautious in spending on older networking gear and are directing more resources to newer technologies. And after rush to expand their wireless networks, carriers have also moderated purchases of mobile equipment..
Competition in the equipment sector, meanwhile, remains intense, forcing vendors to scrap for sales and reduce expenses to keep profit margins stable.
In January, Tellabs posted a 78% drop in fourth-quarter net income and unveiled another batch of job reductions. Tellabs said it would cut an additional 225 jobs -- on top of 125 layoffs announced in September -- as part of a broader reorganization aimed at generating $100 million in savings by the end of 2008.
(END) Dow Jones Newswires
Posted to the site on 26th February 2008
Posted to: www.cellular-news.com/story/29547.php