Lucent Focus of SEC Probe

Shares of Lucent Technologies Inc. fell sharply Friday after reports that the Securities and Exchange Commission has launched an investigation of Lucent’s accounting practices.

An SEC official, speaking on condition of anonymity, subsequently confirmed that the agency is conducting an investigation but did not provide details.

The Wall Street Journal, citing unidentified people familiar with the probe, said the SEC’s enforcement division is examining whether the telecommunications equipment maker improperly booked $679 million in revenue during its 2000 fiscal year, which ended Sept. 30.

Lucent, once a highflying spinoff of AT&T; Corp., restated the revenue in December after conducting its own examination.

Shares of Lucent, one of the most widely held stocks, closed at $15.36 on Friday, down $1.53 in trading on the New York Stock Exchange.

Lucent spokesman Bill Price said Friday that the company has been communicating with the SEC since November and has dismissed one employee as a result of its own internal investigation.

“We made this information public as soon as we discovered these issues back then,” he said. “We voluntarily brought these issues to the SEC and the public at that time. . . . We fully expected that the SEC would look into this matter thoroughly.”

As part of its restatement, Murray Hill, N.J.-based Lucent deducted $199 million in credits offered to customers and $28 million for a partial shipment of equipment, the Journal said.

The newspaper said the SEC is investigating Lucent’s procedures for booking sales, especially its use of nonrecurring credits--or one-time discounts--given to customers, and its accounting treatment of software licensing agreements.

It said the SEC also is looking at how Lucent recognized revenue on sales to its distributors, which may not have sold the products.

SEC spokesman John Heine declined to comment on the report, citing the SEC’s policy to not confirm or deny investigations.

Lucent’s stock has lost more than 77% of its value since an earnings warnings in January 2000 first hinted at financial difficulties.

Lucent’s board fired Richard McGinn as chief executive in October after Lucent had missed many quarters of revenue and earnings targets.