Lucent shares hammered on fourth-quarter profit warning

Lucent has revised profit estimates downwards for its fiscal 2000 fourth quarter from 24 cents per share to between 17 cents and 18 cents per share, the company announced in a statement Tuesday.

Lucent shares were hammered on the New York Stock Exchange, losing $7.13, or 22.7%, in daytime and after-hours trading to end at $24.25, according to online marketplace Island ECN.

Revenue for the quarter, which ended Sept. 30, will be in line with previous estimates at between $9.3 billion and $9.4 billion, Lucent said.

Lucent said that three factors were equally to blame for the lower-than-expected earnings: lower than expected revenue and gross margins in the company's optical systems business; credit concerns in the emerging service-provider market that led to increasing reserves for bad debt; and a greater than anticipated decline in circuit-switching sales and margins.

For fiscal 2000, Lucent expects overall profit to be 10% to 11% lower than in 1999, on revenue approximately 14% higher.

Lucent said that its fourth-quarter results "will impact and lower its guidance for fiscal year 2001."

According to Jeffrey Kagan, an independent telecom analyst in Atlanta, Lucent had been so successful selling telecom networking equipment that it missed the signs of how quickly the demand was shifting to data and optical networking equipment.

A comeback - including rebuilding the company's image and gearing up to meet the demand for new data networking equipment - may take Lucent a few years, Kagan said in an e-mail response to the Lucent statement.

Lucent shares finished the day down 94 cents at $31.38 on the New York Stock Exchange.

Lucent is at www.lucent.com/.