Lucent in pit, stops digging
Looks up from 'low point'
Lucent has reported narrower losses with its first quarter results but warned it will still have to shed more jobs to get back on track.
The struggling telecoms equipment manufacturer today reported pro forma revenues of $3.5 billion for the quarter, slightly ahead of the $3.1 billion to $3.4 billion it expected in its December profit warning, but down on the $3.8 billion recorded during Q1 2001. Net losses for Q1 2002 came out at $423 million, compared to net loss of $464 million recorded in the same quarter last year.
However Lucent expects first quarter revenues are a "low point" for sales and it is predicting revenues to improve by between 10-15 per cent in Q2, the first piece of good news from the firm for many moons.
Even so Lucent plans to cut its workforce to below 55,000 by June, which means another 7,000 people will leave the company. In January 2001, when Lucent launched the first phase of its restructuring program, it employed 106,000 and this was whittled down by a painful mix of redundancies, the outsourcing of some manufacturing operations, divestitures and attrition.
Lucent, which reports all aspects of its restructuring and refinancing program are on track, said its breakeven point for revenues will be reduced to $4.25 billion by the end of its fiscal year, compared to the $4.75 billion previously quoted.
The downturn in telecom spending has hit Lucent, which made a series of expensive data communication acquisitions in the late 1990s, particularly hard.
In May last year, Lucent abandoned plans to merge with Alcatel and the fallout from the failure to conclude that deal has hardly helped matters.
Lucent has an outstanding track record for innovation but a series of poor business decisions and a long string of damaging incidents have brought what was a thriving business to the brink of bankruptcy. Securities and Exchange Commission accounting probes and allegations that workers had sold hi-tech secrets to the Chinese have turned Lucent, a former darling of Wall Street, into a tragi-comic figure. ®
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