Lucent Posts Significantly Reduced Quarterly Earnings, Revenue

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Lucent Earnings Tumble 79%; CEO Expects Fortunes to Improve

• Summary: Lucent Technologies Inc. reported a 79% drop in profit and declining sales for its fiscal third quarter because of delayed spending by U.S. telecommunications operators. The N.J. maker of telecommunications gear said net income fell to $79 million, or two cents a share, in the period ended June 30 from seven cents a share during the year earlier period. In addition, sales fell 12% to $2.05 billion from $2.34 billion. Consensus estimates for the quarter had been for total revenue of $2.16 billion and EPS of $0.04. Lucent executives blamed shrinking sales on delayed spending by U.S. telecom carriers, which they said are assimilating their own merger wave. They expect operators to increase spending on network improvements to make Lucent's fourth quarter the year's best. Some analysts were cautious of such optimistic prognostications. "I would be a little bit worried that the fourth quarter will be a bit softer than they've hinted at," said Richard Windsor, a London-based telecom analyst with Nomura Securities.
• Comment on related stocks/ETFs: For more on Lucent's recent quarter, see their conference call transcript.