Tellabs Unleashes Huge Special Dividend

Tellabs Inc. (NASDAQ: TLAB) has joined in on the game of the special dividend declarations. What is so different for this one is that it is a $1.00 per share special dividend and the stock price as of Thursday closing bell was only $2.95. That comes to nearly a 34% dividend.

This business of telecom and communication equipment has not exactly been the most stellar if you just look at the performance of the stock. Shares have traded in a range of $2.70 to $4.41. Still, the market cap at yesterday’s closing price was $1.08 billion. The difference here is that Tellabs lists more than $1.14 billion in cash and short-term securities with what is effectively no long-term debt.

If you look further on the balance sheet, Tellabs has a net tangible asset value of more than $1.35 billion. Today’s dividend hike still keeps the stock close to its book value.

The trick will be in the company’s ability to operate smoothly. Thomson Reuters is calling for earnings to be -$0.02 per share on a 17.5% revenue decline to $1.06 billion in 2012. For 2013, its is expected to have earnings of only $0.01 per share on another drop in sales of 4.4% to $1.01 billion.

Tellabs shares are trading up 10% at $3.24 on the news this morning.

JON C. OGG