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Lucent Reports Narrower Loss

Earnings: Phone- equipment maker also forecasts a sales increase of as much as 15% from fiscal first quarter.

January 23, 2002|From Bloomberg News

Lucent Technologies Inc., North America's biggest phone-equipment maker, predicted an end to three straight quarters of sales declines and posted a smaller fiscal first-quarter loss after cutting costs.

Sales will rise as much as 15% this quarter from the previous period's $3.58 billion. For the three months ended Dec. 31, Lucent's net loss narrowed to $423 million, or 14 cents a share, from $464 million, or 14 cents, a year earlier.

Chairman Henry Schacht said phone companies "remain cautious" about spending plans for 2002. Chief Executive Patricia Russo has vowed to boost revenue and stem losses that totaled $16 billion last fiscal year by focusing only on sales to big carriers such as Verizon Communications Inc.

"They're starting to turn the ship around," said Ryan Tansey, an analyst at John Hancock Advisers Inc., which owns Lucent shares. But "it's still a 'show me' story."

Excluding certain costs, writedowns, results from discontinued operations and the sale of its optical-fiber unit, Lucent said it would have had a loss of 23 cents a share in the latest quarter, a penny better than the average estimate of analysts polled by Thomson Financial/First Call. Sales, which fell 18% from a year earlier, also exceeded the $3.21-billion average estimate provided by First Call.

The Murray Hill, N.J.-based company said its second-quarter loss, excluding items, will narrow by more than 10% to 15% from the first period's shortfall.

"Lucent's ability to guide second-quarter earnings and sales up just points to the fact that expectations just got too low for the whole sector," said Bob Costomiris, a money manager with Strong Capital Management Inc., which owns Lucent shares.

Lucent said it can break even, excluding some expenses, by the end of this fiscal year on quarterly sales of $4.25 billion, less than its previous threshold of $4.75 billion.

Lucent rose 25 cents to $6.94 on the New York Stock Exchange.

Other technology earnings:

* BellSouth Corp., regional phone company for the Southeastern U.S., said fourth-quarter net income fell 29% as restructuring, currency losses and writedowns in the value of investments--all during a recession--depressed profits.

But excluding one-time charges, the results announced Tuesday handily beat the consensus forecast of Wall Street analysts, who generally praised the company's cost-control efforts and ability to increase its data revenue.

Atlanta-based BellSouth said earnings were $792 million, or 42 cents a share, down from $1.1 billion, or 59 cents, a year earlier.

Not counting one-time costs, BellSouth profit was $1.19 billion, or 63 cents a share, up from $1.12 billion, or 59 cents, a year earlier.

Analysts surveyed by Thomson Financial/First Call expected per-share earnings of 60 cents.

Revenue was $7.63 billion, up from $7.31 billion a year ago, including returns from Cingular Wireless, BellSouth's joint venture with SBC Communications.

BellSouth shares were down 60 cents to $37.45 on the NYSE.

* Motorola Inc., the Schaumburg, Ill., maker of mobile phones, posted a fourth-quarter loss of $1.24 billion as demand dropped. The deficit gave Motorola its first annual loss before restructuring costs in 71 years.

The quarterly loss was 55 cents a share, contrasted with net income of $135 million, or 6 cents, a year earlier. Revenue fell 27% to $7.32 billion.

Before certain costs, the full-year loss was $697 million, compared with Motorola's previous annual loss of $3,745 in 1930. Chief Executive Christopher Galvin has vowed to return to profitability in 2002 by cutting jobs and closing plants, especially in the semiconductor unit, which is generating most of the company's losses.

* Vitesse Semiconductor Corp., a Camarillo maker of chips for fiber-optic networking equipment, reported a fiscal first-quarter loss of $106.9 million as customers trimmed orders amid an inventory glut. The per-share loss was 54 cents. Year-earlier net income was $28.1 million, or 15 cents. Sales in the period ended Dec. 31 declined 76% to $39.1 million.

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