Lucent's loss narrows to $351 million for quarter

Telephone equipment firm cut its costs

sales also fell

April 24, 2003|By BLOOMBERG NEWS

MURRAY HILL, N.J. - Lucent Technologies Inc., the largest U.S. telephone equipment maker, said yesterday that its second-quarter net loss narrowed to $351 million as costs fell. Sales tumbled 32 percent.

The net loss, Lucent's 12th straight, was 14 cents a share, compared with $495 million, or 16 cents, in the year-earlier period. Revenue fell to $2.40 billion from $3.52 billion.

Chief Executive Officer Patricia F. Russo said sales might decline more than forecast in fiscal 2003. She said Lucent still plans to return to profitability this year, excluding certain expenses, as the company pares spending. Russo, trying to preserve cash amid lower demand from phone companies, boosted the company's gross margin by 9 percentage points in the second quarter.

"They're definitely turning the corner," said Rao Aisola, a bond analyst at Bear Stearns & Co. who follows Lucent. "They burned $300 million in cash, and the Street was expecting $500 million." The increase in gross margin "is huge," he said.

Lucent's gross margin, or the percentage of sales remaining after subtracting the cost of goods sold, jumped to 32 percent from 23 percent a year earlier. Total costs of products and services fell 40 percent to $1.64 billion and total operating expenses fell 45 percent to $742 million, the company said.

Shares of Lucent rose 4 cents to close at $1.72 in New York Stock Exchange composite trading of 56 million, making it the most-actively-traded U.S. stock.

Russo, noting unpredictable demand amid the prolonged telecommunications industry slump, said in a conference call that revenue for the fiscal year that ends in September will fall 20 percent to 25 percent. The previous forecast was for a 20 percent decline from sales of $12.3 billion in 2002.

Excluding net expenses of 6 cents a share for items such as lawsuit settlements and debt buybacks, Lucent said, it would have had a loss of 8 cents in the quarter that ended March 31. Analysts had expected a loss of 10 cents on sales of $2.43 billion.

The company said it expects to end fiscal 2003 with more than $2.5 billion in cash, compared with a previous estimate of more than $2 billion. Lucent had $3.4 billion in cash and short-term investments as of March 31, down from $3.7 billion in December.

Lucent also said it needs $2.4 billion in quarterly revenue to break even by the end of its fiscal year, down from an earlier estimate of $2.5 billion. The company did not issue forecasts for its fiscal third and fourth quarters.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.