"the quality of the earnings and the quality of its balance sheet.."
Lucent's 3rd-Qtr Profit, Sales Seen Rising: Earnings Outlook
Murray Hill, New Jersey, Oct. 24 (Bloomberg) -- Following is a summary of expectations for Lucent Technologies Inc.'s fiscal fourth-quarter earnings, which are scheduled to be released Tuesday.
Expected Earnings
Lucent, the world's No. 1 phone-equipment maker, is expected to report a profit of 29 cents a share before acquisition costs in the quarter ended Sept. 30, the average estimate of analysts polled by First Call Corp. Some estimates published on the Internet are as high as 31 cents.
Most analysts expect sales of $10 billion to $10.5 billion.
In the year-ago quarter, Lucent had pro-forma earnings of $487 million, or 16 cents, including costs for research and development at companies Lucent acquired. Lucent would have earned $647 million, or 21 cents, before those costs. Pro-forma revenue was $8.57 billion.
Results in the year-ago period were restated to reflect the acquisitions of Ascend Communications Inc., Nexabit Networks Corp., Kenan Systems Corp. and several other companies.
Time
Murray Hill, New Jersey-based Lucent is scheduled to report earnings on Tuesday at about 7 a.m. New York time.
Behind the Numbers
Lucent has benefited from rising international sales, which represent about 30 percent of total revenue. That's overshadowed the slower pace of U.S. sales growth, something many investors want to see pick up.
Sales of wireless and fiber-optic products are rising 20 percent or more, analysts said, as phone companies build their networks to handle more Internet and data traffic. Lucent also is selling more traditional phone switches, as well as equipment that delivers voice, data and video traffic on a single network. Lucent gained the equipment in the June purchase of Ascend.
Some analysts have criticized Lucent for carrying too much inventory and receivables on its balance sheet.
What the Experts Say ''Most of the growth this year has come from international sales,'' said Jae Lee, a telecommunications analyst at Minneapolis-based American Express Financial Advisors, which owns about 17 million Lucent shares. ''This report will be important to see what growth they're getting out of the U.S.''
''The issue with Lucent is the quality of the earnings and the quality of its balance sheet,'' said Walter Casey, an analyst at Banc One Investment Advisors in Columbus, Ohio. ''This report will be scrutinized very carefully.''
Previous Market Reaction
Lucent fell 6 57/64, or 9 percent, to 69 15/16 on July 20 after the company's fiscal third-quarter sales to U.S. companies lagged some forecasts, raising concern that growth could slow in the second half of the calendar year.
Market Performance
Lucent has dropped 28 percent since its record close of 78 7/16 on July 16. The shares have gained 2.7 percent this year, though have risen more than eightfold since the 1996 initial public offering.
The shares fell 9/16 to 56 7/16 Friday.
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