Feeds

Lucent warns again as sales plunge again

Missing targets

  • alert
  • submit to reddit

Top three mobile application threats

ComputerWire: IT Industry Intelligence

Lucent Technologies Inc has continued to under-estimate the extent of the slump in spending on telecoms equipment and announced on Friday that it expects revenue for its fourth quarter to fall 20% to 25% below the previous three months to a range of $2.2bn to $2.36bn.

Given that analysts had been expecting a modest 5% sequential decline in revenue to $2.8bn, the severity of the problems facing the Murray Hill, New Jersey-based company are far worse than expected and are bound to produce another batch of huge job losses.

A workforce that stood at 106,000 in 2001 will be down to 45,000 by the end of this year and is likely to fall to around 30,000 in 2003 if it is to get costs matching the shrivelled level of revenue.

Lucent said that it was developing plans to cut its quarterly break-even level of revenue to $2.5bn to $3bn, though it is still engaged in a previous cost-cutting exercise to bring the figure down to $3.5bn.

With these additional restructuring actions, Lucent still targets a return to break-even by the end of the 2003 financial year. In the meantime, it continues bleeding cash and forecasts a fourth-quarter loss of $0.45 a share as a result of the revenue decline and a "significant customer financing default".

Despite the savage revenue decline, Lucent said it still expects to meet the covenants on its undrawn $1.5bn credit facility.

The news pushed its shares down another 11.5% to $1.46, valuing the company at just $5bn, and while the scale of the telecoms slump has hit all suppliers, Lucent is suffering worst than most.

Certainly the company has shown a degree of optimism which could not be justified given the financial state of its customers. When it reported its first-quarter figures in January, CFO Frank D'Amelio said: "We continue to believe that revenues in the first fiscal quarter of 2002 represented the low point for Lucent sales in the current market downturn.

Revenue in the first quarter was $3.5bn, 48% higher than the best the company now expects in the fourth quarter.

© ComputerWire

3 Big data security analytics techniques

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.