NAPERVILLE, Illinois, April 22 /PRNewswire/ --

- Company is freeing up resources to innovate for customers

Tellabs' first-quarter 2008 revenue totaled US$464 million, up 3% from US$452 million in the first quarter of 2007.

Tellabs earned US$17 million or 4 cents per share on a GAAP (U.S. generally accepted accounting principles) basis, compared with US$25 million or 6 cents per share in the year-ago quarter.

On a non-GAAP basis, Tellabs earned US$32 million or 8 cents per share, compared with US$34 million or 8 cents per share in the year-ago quarter. Non-GAAP results exclude a pretax charge of US$22.6 million, which includes US$8.0 million or 1.3 cents per share in equity-based compensation expense.

Non-GAAP gross profit margins were 39% in the first quarter of 2008, compared with 34% in the fourth quarter of 2007. The change stemmed from a shift in product mix.

"Tellabs performed well in a challenging industry environment. Going forward, our top priority is to free up resources to innovate for customers," said Rob Pullen, Tellabs president and chief executive officer.

Tellabs is discontinuing the Tellabs(R) 8865 optical line terminal, but continuing development of the Tellabs(R) 1100 GPON (gigabit passive optical network) multiservice access series. Tellabs will use freed-up resources to fund growth initiatives.

Second-Quarter 2008 Guidance -- The following statements are forward-looking statements that are based on current expectations and involve risks and uncertainties, some of which are set forth below. Tellabs expects second-quarter revenue to be in the range of US$425 million to US$445 million. Non-GAAP gross margin is expected to be 31%, plus or minus, as a result of product mix. Non-GAAP operating expense is expected to be flat to slightly down from the first quarter of 2008. Non-GAAP gross margin excludes about US$2 million in equity-based compensation expense. Non-GAAP operating expense excludes about US$6 million in equity-based compensation expense.

Share Repurchase -- Under previously announced share repurchase programs, Tellabs repurchased 21.5 million shares at a cost of US$142 million during the first quarter of 2008. Since 2005, Tellabs has repurchased 92.9 million shares at a cost of US$803 million (about 20% of shares outstanding).

Simultaneous Webcast and Teleconference Replay -- Tellabs hosted an investor teleconference to discuss its first-quarter 2008 results and provide its outlook for the second quarter of 2008. A taped replay of the call is available until midnight Central Daylight Time U.S. on Thursday, April 24, at +1-706-645-9291. When prompted, enter the Tellabs conference ID number: 42786217. A podcast of the call is available at http://www.tellabs.com/news/feeds/.

Tellabs advances telecommunications networks to meet the evolving needs of users. Solutions from Tellabs enable service providers to deliver high-quality voice, video and data services over wireline and wireless networks around the world. Tellabs (Nasdaq: TLAB) is part of the NASDAQ-100 Index, NASDAQ Global Select Market, Ocean Tomo 300(TM) Patent Index and the S&P 500. http://www.tellabs.com

Forward-Looking Statements -- This news release, which includes the results of operations discussion that follows, contains forward-looking statements, including but not limited to the guidance information contained in this release that involve risks and uncertainties. Actual results may differ from the results discussed in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, risks associated with: the competitive landscape, including pricing and margin pressures, the response of customers and competitors, industry consolidation, the introduction of new products, the entrance into new markets, the ability to secure necessary resources, and the economic changes generally impacting the telecommunications industry. The company undertakes no obligation to revise or update these forward-looking statements to reflect events or circumstances after today or to reflect the occurrence of unanticipated events. For a more detailed description of the risk factors, please refer to the company's SEC filings.

Tellabs and Tellabs logo are registered U.S. trademarks of Tellabs Operations, Inc. in the United States and/or in other countries.

Web site: http://www.tellabs.com

media, George Stenitzer, +1-630-798-3800, george.stenitzer@tellabs.com, or investors, Tom Scottino, +1-630-798-3602, tom.scottino@tellabs.com, both of Tellabs/ NOTE TO EDITORS: The complete text of this release is available at www.tellabs.com/news/2008/1q08.pdf