Tellabs delivered better-than-expected results in the fourth quarter of 2005, including meeting its aggressive sales goal for its closely watched edge routing products.

The equipment vendor reported $92 million in net income for the fourth quarter and $176 million for the full year 2005. Fourth-quarter revenue was $521 million, up 16% from the combined revenue of Tellabs and its acquired companies (AFC and Vinci Systems) a year earlier. And annual revenue for 2005 was $1.9 billion, a 13% improvement from the three companies’ combined revenue in 2004.

Tellabs achieved its goal of earning $60 million in revenue from its broadband data group (which includes the 8800 edge router) in 2005, despite the fact that the company was only halfway toward that goal at the end of the third quarter. The company’s broadband data group reported $31 million in fourth-quarter revenue.

Revenue from Tellabs’ transport business was up 8% from a year earlier to $170 million in the fourth quarter and up 7% to $638 million for the full year 2005. Chief Executive Officer Krish Prabhu addressed speculation (for example, that expressed in a Merrill Lynch research note earlier this month) that the company’s long-dependable transport business might stop growing this year. The fact that sales of Tellabs’ flagship transport product, the 5500 crossconnect, grew more than 10% in 2005 is “a good indication of underlying traffic demand on the network,” he said.

Revenue from Tellabs’ access business was $180 million, up 46% from the combined access revenue of Tellabs, AFC and Vinci a year earlier. And full-year access revenue was $617 million, up 29% from the three companies’ combined efforts in 2004.

Vendors have submitted their responses to the joint request for proposals offered by the top three U.S. carriers regarding gigabit passive optical networking (GPON) gear, Prabhu said. But when asked about the pace at which the transition to GPON deployment would occur, he said that would be dictated by carriers and their desire to offer 100-Mb/s service as opposed to 30-Mb/s service. He also appeared to fire a shot at competing vendors who announced their GPON products last year, before Tellabs. “It’s more a question of time to volume rather than time to market,” he said. “We’re very well positioned from a time-to-volume standpoint.”

When asked whether Tellabs saw a “budget flush” from customers at the end of 2005--the year-end spending of customers’ remaining budget funds, which Lucent reported missing out on in December--Prabhu said, “I don’t know what budget flush is, frankly, and I don’t know if it’s relevant in this day and age. We’re focused more on addressing the pain points in the network rather than anticipating budget flush.”

Revenue from the company’s managed access business was down 19% from a year earlier to $91 million in the quarter and up 10% for the full year to $365 million.

Revenue from voice quality enhancement was down 54% from a year earlier to $6 million in the fourth quarter, as the company integrates these standalone products into its other gear.

Services revenue was up 8% from a year earlier to $44 million in the quarter and up 6% to $167 million for the full year.

The company expects the first quarter of 2006 to bring more than $490 million in total revenue and roughly 14% revenue growth from a year earlier.