Lucent Stock Tumbles 16% as It Reports Quarterly Loss

Lucent Technologies suffered a rout in its stock for the second time this year after the company reported Thursday a quarterly loss and said profit in the next two quarters will lag forecasts.

Shares of the company, the No. 1 telecom equipment maker, plummeted $10.31 to $54.19 on the New York Stock Exchange as more than 85 million shares changed hands.

Lucent reported a $301 million net loss for the latest quarter, or 9 cents per share, due to hefty charges for acquisition and discontinued operations.

Revenue rose 18% to $8.71 billion from $7.4 billion.

Excluding acquisition and amortization-related charges, as well as discontinued operations, Lucent earned $1 billion, or 30 cents a share. Analysts expected 23 cents.

But investors focused on the company’s warning about the near term: Lucent predicted revenues and earnings from continuing operations would grow about 15% in the quarter ending Sept. 30, when analysts were expecting 22%. Also, earnings in the final three months of 2000 are likely to fall 15% despite an expected 20% revenue increase, the company said.

Lucent blamed a major shift from older switching products with high-profit margins to newer ones with lower margins, among other factors. Lucent still is struggling to recover from a profit drop in the first quarter, which hammered its stock in January. Sales of new products the company is betting on to challenge rivals including Nortel Networks haven’t materialized fast enough to make up for a slowdown in its traditional business of selling phone switches.

CEO Rich McGinn is moving aggressively to exit certain businesses and focus on making equipment for data, fiber-optic and wireless networks.

Lucent said it plans to spin off its $4-billion-a-year microelectronics business, with an initial public offering of part of the new company in 2001. The unit makes chips and optoelectronic components such as lasers used to build the Internet.

What many investors want to know now is, what about the rest of Lucent?

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Tortured Path

Lucent Technologies began the year with a profit warning, and its stock has mostly struggled since. It tumbled Thursday in the wake of another warning. Weekly closes and latest (ticker symbol: LU) on the New York Stock Exchange:

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Thursday: $54.19, down $10.31

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Source: Bloomberg News