Lucent posts first Q profit in three years
But sales still falling
Lucent Technologies has posted a profit - its first in more than three years.
After 13 straight quarterly losses dating back to March 2000, the beleaguered telecoms equipment maker recorded profits of $77 million, or $0.02 per share, for the three months to 30 September. Same quarter last year, Lucent posted a loss of $2.88 billion, or $0.84 per share.
The quarter was still marked by falling sales, which have plagued Lucent and its rivals since the telecoms meltdown began three years ago. Fourth quarter revenues were $2.03 billion, approx. $250 million less than in the same period 12 months earlier. On a sequential basis sales were up 3 per cent.
The fiscal fourth quarter results came as something of a surprise to analysts, with the consensus estimate on Wall Street for a loss of $0.04 per share on revenues of $2.2 billion.
"It feels great to post a profitable quarter with positive operating cash flow," said Lucent Technologies chairman and CEO Patricia Russo in a statement. "It's the culmination of a lot of hard work and dedication on the part of the Lucent team.
"At this point, we have essentially completed our restructuring initiatives, reduced our total expenses by about $5.6 billion year-over-year, and implemented plans to broaden our revenue base in areas like services, government contracts and outside the United States. As always, we will continue to ensure that our cost and expense profile is in line with the market."
The restructuring Russo referred to has been enormous to say the least and has seen the firm cut its headcount from over 150,000 three years ago to around 40,000 currently through both redundancies and disposals.
In other commentary, Russo described the telecoms equipment market as challenging, but said "signs of stability" had emerged, "with pockets of opportunity in areas like services, metro optical, voice over IP, broadband access and high-speed wireless data."
The company gave no forecast for the upcoming quarter, but Chief Financial Officer Frank D'Amelio said that sales for the whole of Lucent's fiscal 2004 year should be flat or up marginally from the year ending 30 September 2003. He also predicted sustainable profitability in the 2004 year with gross profit margin rate of about 35 per cent of sales. Lucent had a fourth-quarter gross margin of 43 per cent compared to 29 per cent a year ago.
For fiscal 2003, Lucent reported revenues of $8.5 billion compared with $12.3 billion in fiscal 2002. The net loss was $770 million, or $0.29 per share, during fiscal 2003, compared with a net loss of $11.8 billion, or $3.49 per share, during fiscal 2002.