Lucent Reports $8.8-Billion Loss
Battered telecom equipment firm Lucent Technologies Inc. said Tuesday that it posted an $8.8-billion loss in its fourth fiscal quarter ended Sept.30--one of the largest in U.S. corporate history--mainly because of $8 billion in special charges for job cuts and other restructuring moves.
Even without the one-time charges, however, Lucent’s operating results were worse than Wall Street expected as sales plunged. The firm’s chief executive said Lucent will return to profitability sometime in 2002, but some analysts were doubtful.
Lucent said its quarterly net loss amounted to $2.59 a share, compared with a loss of 14 cents a share a year earlier.
Excluding restructuring costs, Lucent said its loss from continuing operations totaled $909 million, or 27 cents a share. Analysts had expected a loss of 23 cents.
Sales sank 28% to $5.2 billion.
The huge restructuring cost included charges for severance and other benefits for laid-off workers and others who took voluntary retirement, and write-offs of obsolete inventory and equipment.
“I think Lucent has turned the corner,” CEO Henry Schacht said. “We’ve taken $2.4 billion out of expenses. We’re thousands of people less. We’re an entirely different business.”
Lucent is among several tech and telecom companies that have recorded massive losses this year after taking write-downs on problem businesses. Nortel Networks Corp. recorded a $19.4-billion quarterly loss earlier this year.
Since January, Lucent has cut 29,000 jobs through layoffs, voluntary retirements and spinoffs, leaving 77,000 employees.
Schacht said Lucent should break even and then return to profitability sometime during its 2002 fiscal year.
But telecom analyst Daniel Shin of Robert W. Baird & Co. said that uptick may not happen. “I’m finding it very, very difficult to give them break-even sometime next year,” Shin said.
Analyst Steve Levy of Lehman Bros., however, said Lucent’s sales in the quarter “held up better than anybody else’s in the industry [and] their balance sheet continued to show improvement.”
Lucent’s shares fell further on the news, losing 26 cents to $6.64 on the New York Stock Exchange.
