YOU ARE HERE: LAT HomeCollections


Lucent Doubles Its 2nd-Quarter Profit

The company's stock, up fivefold in the two years since it went public, soars on the news.

April 23, 1998|From Times Wire Services

Lucent Technologies Inc.'s fiscal second-quarter profit more than doubled as the phone equipment maker boosted sales at a fast clip and kept a lid on costs.

Lucent's stock soared on its report that profit rose to $159 million, or 12 cents a diluted share, up from $66 million, or 5 cents, a year earlier and higher than the 9 cents analysts were expecting for the quarter ended March 31.

Revenue rose a better-than-expected 20% to $6.16 billion.

Under Chairman and Chief Executive Richard McGinn, Lucent's profit and stock price are soaring on demand from companies including its former parent AT&T Corp. for wireless equipment as well as devices used to carry mushrooming data and Internet traffic.

McGinn was promoted to CEO of Lucent in October 1997 and chairman two months ago. Lucent's results were bolstered by its ability to keep costs down, something McGinn has been focused on, analysts said.

Shares in Lucent have surged more than fivefold since its initial public offering in April 1996. Lucent's spinoff from AT&T was completed that September.

Murray Hill, N.J.-based Lucent rose $2.25 to close at $76.50 on the New York Stock Exchange.

Xerox Corp. said its first-quarter profit rose 12%, matching estimates, as the office equipment maker sold more digital copiers and service contracts while keeping a lid on costs.

Profit rose to $301 million, or 84 cents a diluted share, from $270 million, or 75 cents, in the year-ago period. Revenue rose 7% to $4.3 billion, but was hurt by the strong dollar, Xerox said. Analysts were expecting Xerox to earn 83 cents a share.

President G. Richard Thoman, the heir-apparent hired last summer, has been cutting costs in part to win business from Hewlett-Packard Co. and others in the market for lower-priced consumer copiers and printers.

Thoman said the strong dollar and the Asian economic crisis "will present significant challenges for the rest of the year."

Xerox also said it will resume a $1-billion stock buyback program it suspended in June after acquiring for $1.5 billion the 20% of a joint venture with Rank Group that it didn't already own.

The profit report and the buyback were not enough to boost Xerox stock. Its shares fell $2 to $109.50 on the NYSE.

Earlier this month, Xerox said it would trim costs more by slashing 9,000 jobs, or about 10% of its work force, in the next two years. The company will take a second-quarter charge of about $1 billion to pay for the cuts and the closing of some facilities.

At a Glance


* Mobil Corp., the nation's second-largest oil company, said profit fell 15% to $715 million, or 88 cents a diluted share, better than a drop to 76 cents a share that analysts expected. Revenue fell 16% to $13.6 billion.

* Shell Oil, the U.S. arm of the Europe's Royal Dutch/Shell Group, said profit fell to $171 million from $499 million a year ago, as prices for the low-quality heavy crude it produces dipped. Revenue plunged 37% to $4.80 billion.

* Conoco Inc. said profit fell 13% to $287 million. As a wholly owned unit of DuPont, Conoco doesn't report per-share earnings. Revenue fell 11% to $4.8 billion.


* Allstate Corp.'s first-quarter earnings rose 23% as the insurer benefited from lower costs of underwriting and paying claims. The insurer's profit rose to $688 million, or $1.62 a diluted share, from a year earlier, beating the $1.42 analysts expected. The company's loss ratio fell to 69.6% of premiums, from a 72% average last year, leading some analysts to increase forecasts for the company's 1998 earnings. Revenue rose 4% to $6.45 billion.

* Lincoln National Inc.'s earnings rose 8% to a better-than-expected $128 million, or $1.26 a share, from a year ago, led by life insurance, annuities and other financial services.


* H.F. Ahmanson & Co., the second-largest U.S. thrift, said first-quarter earnings rose 37%, led by gains in lending fueled by its purchase of Coast Savings Financial Inc. The Irwindale-based company said profit rose to $128 million, or $1.09 cents a diluted share, from a year earlier, exceeding analyst forecasts of 94 cents. The company said the results reflect strong performance in its mortgage lending, retail banking and consumer lending businesses.

* SunAmerica Inc. said profit rose 42% in the second quarter to $132.4 million, or 60 cents a diluted share, from a year ago. Sales rose 37% to $2.09 billion. Annuity sales rose 23% and sales of mutual funds surged 62%.


* Hilton Hotels Corp.'s first-quarter profit rose 13% as demand for hotel rooms let it raise rates and a casino expansion brought in more gamblers. Net income rose to $77 million, or 29 cents a diluted share, from $68 million, or 12 cents, a year ago, matching estimates, as revenue rose 5% to $699 million.

* AlliedSignal Inc. said its first-quarter net income rose 16% to a record $300 million, or 52 cents a diluted share, beating estimates by a penny, on strong sales from its aerospace and engineered materials businesses. Revenue rose 10% to $3.65 billion.

Los Angeles Times Articles