That forced the equipment maker to introduce its own Ethernet products, like the 9200 network routing platform it developed in 2011, but it didn’t go as planned and Tellabs says it is abandoning the platform along with 300 jobsto cut expenses. As analysts had expected the product to contribute as much as $20 million to the top line this year, its elimination changes their outlook.
While I wouldn’t dive in here, Tellabs will be introducing new products and its expense containment initiatives give it an excellent shot at bouncing back because telecoms still need to upgrade their networks. Of course, there’s stiff competition for the work and the stock has been on a long, slow decline, so now is the time to prove its mettle. Plans are wonderful — the 9200 platform, for example, was also going to be a revolutionary product — but it’s results that investors need to see, and Tellabs seems a risky bet.
For mobile game maker Glu Mobile, it was an analyst downgrade by that sent its shares lower, though as fellow Fool Rich Smith points out, the target price is actually above where it currently trades. The more worrisome issue for investors is the amount of cash it’s burning through as losses continue to mount, and Rich suspects the analyst simply wanted to correct his previous buy rating before the game maker reports earning next week.
I’ve never been much of a fan of Glu’s “freemium” business model and have had a long-running underperform rating on the company in Motley Fool CAPS. I surmised the stock would come unglued as players resisted the “free to play, pay to play more” model that’s undone a number of game makers in the past, and Glu’s lost half its value since I first weighed in. But you can tell me in the comment box below if you think it can get back in the game and record some profits to turn things around.
The article 3 Stocks Laboring to Survive originally appeared on Fool.com and is written by Rich Duprey.
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