Lucent Shares Slide 8.5% on Revised Earnings Estimate
Lucent Technologies Inc. shares slid to a new three-year low Thursday after the communications equipment maker said it will post a much bigger loss than expected this quarter, the fifth time this year it has warned of disappointing results.
New Chief Executive Henry Schacht said he plans to cut $1 billion in operating costs to help return the company to profitability and restore confidence on Wall Street. But even as Schacht promised that 2001 will be “a rebuilding year, a turnaround year for Lucent,” the stock price fell, to close off $1.31, or 8.5%, to $14.19 on the New York Stock Exchange.
At one point, the stock fell as low as $12.50, down from a peak of $84.18 late last year and only $5 above where Lucent began trading after it was spun off by AT&T; through an initial public offering in early 1996.
Lucent said it now expects a loss of 25 cents to 30 cents a share from continuing operations for its first fiscal quarter ending Dec. 31. Analysts at First Call/Thomson Financial had expected a loss of 1 cent.
In warning of its latest stumble, Lucent also revised the results for its July-September quarter for the second time in a month, lowering its revenue tally from $9.4 billion to $8.7 billion and its operating earnings from 18 cents a share to 10 cents.
Lucent said adjusted results for the fiscal year that ended Sept. 30 will be $33.6 billion in revenue, with earnings of 93 cents a share from continuing operations.
“We found that in one case there had been misleading documentation and incomplete communications between a sales team and the financial organization,” Schacht said of the adjustment. He said an inquiry is continuing.
