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Lucent beats forecasts
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October 26, 1999: 2:28 p.m. ET
Earnings rise 50% amid strong wireless growth; firm sets realignment
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NEW YORK (CNNfn) - Lucent Technologies Inc. reported a 50-percent increase in its fiscal fourth quarter operating earnings, topping Wall Street forecasts amid growth in its wireless, optical and data network businesses.
The telecom equipment maker also announced a corporate realignment that will segment the firm into four core businesses.
For the quarter ended Sept. 30, Lucent (LU) logged an operating profit of $972 million, or 31 cents per share. Analysts polled by earnings tracker First Call had expected profit of 29 cents per share.
Lucent has surpassed Wall Street expectations every quarter since AT&T Corp. (T) spun off the company in 1996.
Lucent outpaced its year-earlier results, when it earned $647 million, or 21 cents per share, on $8.6 billion in revenue.
Including costs associated with acquisitions and other one-time gains and charges, the Murray Hill, N.J.-based company earned $948 million, or 30 cents per share, up from $220 million, or 7 cents a share, a year earlier.
Revenue rose 23 percent to $10.6 billion.
Revenue outside the U.S. grew 38 percent. For the full fiscal year, international sales accounted for 32 percent of total sales, up from 23 percent when Lucent became an independent company.
For fiscal 1999, income rose 46 percent to $3.83 billion, or $1.22 per share, excluding one-time items, up from $2.62 billion, or 86 cents per share, in 1998. Revenue increased 20 percent to $38.3 billion.
Including one-time items, 1999 net income totaled $4.77 billion, or $1.52 per share, up from $1.04 billion, or 34 cents a share, a year earlier.
Realignment set
Separately, Lucent announced a realignment that will allow the company to focus on four business segments: service provider networks, enterprise networks, services and semiconductors.
"These core businesses will address specific markets and allow us to approach customers in a faster and more integrated fashion," said Richard McGinn, Lucent chairman and chief executive officer. "The leaders of each of these businesses have a keen understanding of their marketplaces and have demonstrated the speed, response and creativity our customers demand."
Analysts said the move should add more growth to Lucent's financial performance down the road, particularly as carriers and Internet providers demand more services from their equipment suppliers.
"It will help because it separates the services area from the other businesses," said Mark Cavallone, telecom analyst at S&P Equity Group. "Lucent always says their services are doing well, but it's been hard to say how well. From a carrier perspective -- which is where most of Lucent's sales are -- they're demanding more services to maintain their networks."
Lucent shares rose 3-13/16 to 63-11/16 in afternoon trade.
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Lucent Technologies
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