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Lucent narrows 1Q loss
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January 22, 2002: 12:29 p.m. ET
Telecom equipment maker posts loss of 23 cents a share, sets more job cuts.
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NEW YORK (CNN/Money) - Lucent Technologies' massive restructuring program helped it narrow its losses for the first quarter, but the telecommunications equipment maker said it plans to cut 7,000 more jobs as it continues its struggle to return to profitability.
Before the U.S. markets opened Tuesday, Lucent posted a net loss of $423 million, or 14 cents per share for its fiscal first quarter ended Dec. 31.
That compares with a loss of $464 million, or 14 cents per share in the year-earlier quarter but is an improvement over the huge $8.8 billion, or $2.59 per share, loss it logged in the quarter which ended in September.
Excluding the impact of one-time items, such as the sale of its optical-fiber unit, Lucent logged a pro-forma loss of $757 million, or 23 cents per share, beating by a penny the consensus estimate of analysts polled by earnings tracker First Call. During the same quarter a year earlier, Lucent reported a loss of 42 cents per share.
Lucent's first-quarter revenue totaled $3.58 billion, slightly more than the company had forecast last month.
Shares of Lucent (LU: up $0.17 to $6.86, Research, Estimates) rose 2.8 percent amid a broader downturn on the Nasdaq in late-morning trade Tuesday as investors took solace in the results and the company's outlook for the coming months.
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"These results came in the face of what we perceive as the low point of Lucent sales, given the current market condition," Lucent Chairman Henry Schact said in a teleconference Tuesday morning.
Frank D'Amelio, Lucent's chief financial officer, said revenue in the current quarter will rise between 10 percent and 15 percent from the first quarter, while the company's bottom line will improve at an even greater rate.
By First Call's count, analysts generally had expected Lucent's top line in the current quarter to be about $3.6 billion, essentially flat with the first quarter, and the company's loss to amount to 17 cents per share.
As have most telecom and data-networking equipment companies, Lucent has been hard hit over the past year by a sharp slowdown in capital spending by service providers and corporations that have either scaled back or deferred many new-equipment orders in the face of a slowing and uncertain economy.
In response to that slowdown, Lucent has implemented a huge restructuring plan under which it has slashed its work force from 123,000 to 74,000 as of Dec. 31 through voluntary buyouts, layoffs and sales or outsourcing of some businesses. Another 12,000 would leave the ranks when the company spins off its Agere (AGR.A: down $0.03 to $5.19, Research, Estimates) semiconductor unit.
The company also recently named Patricia Russo, one of Lucent's founding executives, as its new CEO two weeks ago. She had spent nearly 20 years with AT&T and then Lucent when it was spun off before leaving in August 2000 to take the No. 2 post at photographic products company Eastman Kodak.
During Tuesday's teleconference, Russo promised continued progress in the company's efforts to rein in costs and return to profitability.
"I'm confident in the plan that our team is executing," she said. "It's produced a more focused strategy with a streamlined portfolio" of products.
Originally, the company had said it planned to cut its work force to a level between 57,000 and 62,000 employees. But D'Amelio said Tuesday that the company's current projections show that it should get to below 55,000 employees by the end of June.
Lucent executives have said they expect the company to show a profit and have positive cash flow sometime in the year 2002. However, several analysts questioned the company's outlook during Tuesday's teleconference, saying the return to profits could be delayed into fiscal 2003 given the market uncertainty. 
-- From staff and wire reports
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