Lucent restates financials downward, to restructure
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Lucent Thursday said its fiscal first-quarter loss would be wider than expected and announced a restructuring plan to slash over $1 billion in costs.
The telecom equipment maker also revised previously reported results for the fourth quarter, which ended Sept. 30. Lucent's stock has plunged from a 52-week high of $83.75 to $15.50 at closing Wednesday. The stock was trading down $1.75 at $13.75 in early trading Thursday, near its 52-week low of $13.50.
Lucent said in a statement that it expects a loss per share of 25 to 30 cents in the first fiscal quarter of 2001, ending Dec. 31, well off the consensus projection of 28 analysts of a loss of one cent, according to First Call/Thomson Financial.
Pro forma revenue in the quarter will decline about 20% compared to the year-ago quarter, Lucent said.
The expectations represent a "significant sales decline in North America," Lucent Chairman and CEO Henry Schacht said. Schacht replaced CEO Richard McGinn, who was ousted in October after a streak of disappointing quarterly results.
The decline, according to Lucent, is due to an overall softening in the competitive local exchange carrier (CLEC) market, slowdown in capital spending by established service providers, lower software sales, and a more focused use of vendor financing.
Schacht said Lucent also saw an impact from expenses as a result of a cost structure that was built for a larger revenue base. The company said it would issue its actual first quarter results in late January.
Lucent also lowered its fiscal 2000 fourth quarter results. Earnings per share are 10 cents, 8 cents below its previous announcement. Revenue was lowered from $9.4 billion to $8.7 billion, for the quarter that ended Sept. 30. For the full fiscal year 2000 the adjusted results show revenue of $33.6 billion, compared to the earlier announcement $34.3 billion.
Lucent said it has an "aggressive plan" to streamline its operations, prune its product portfolio and create a "significantly reduced" cost structure.
Schacht said the plan will enable Lucent to achieve "improved sequential performance every quarter of 2001 and growth at or above market rates by the end of fiscal year 2002."
The plan comprises rationalization of various product lines, consolidations of corporate center functions, elimination of duplications in marketing functions, and streamlining of sales support functions, Lucent said. Details of restructuring costs will be given when Lucent publishes its first quarter results in January, the company said.
Lucent said the turnaround plans include the spinoff of its microelectronics unit Agere Systems, which makes programmable network processors and was acquired by Lucent in January, and the sale of its Power Systems to Tyco International Ltd.
Lucent Technologies, in Murray Hill, N.J., can be reached at 908-582-8500 or at www.lucent.com/.
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