Lucent CEO-2: Co Continues To Deliver On Many Projections
12 Mar 12:58
By Johnathan Burns
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Lucent Technologies Inc. (LU) Chief Executive Patricia
Russo said Tuesday investors should remember the company reaffirmed it will
increase revenue sequentially in the ongoing fiscal second quarter while its
competitors anticipate declining sales over the same period.
In an interview with Dow Jones Newswires, Russo said Lucent continues to
deliver on several parts of its guidance, even though it lowered sequential
sales growth projections to modest to 10% from the previous 10% to 15% over the
first quarter's $3.58 billion.
"I think it's important to remember we reaffirmed top-line growth, available
margins still in the 20% (range) and bottom-line improvement," she said.
Before the market opened, Lucent said its sales will not grow as robustly as
expected and the company will not reach a profitable point until 2003. In
addition, Lucent will likely not meet financial measurements allowing it to
spin its remaining stake in Agere Systems Inc. (AGRA) until the calendar third
quarter.
Chief Financial Officer Frank D'Amelio said the company has already gotten
an indication from the Internal Revenue Service that it would allow a tax-free
spin of the remainder of Agere after the initial June 30 deadline.
Russo said the revision to revenue growth estimates came as a result of a
recent sales funnel review. About three weeks ago, Russo and other officials
had said they remained confident that sales would grow 10% to 15% sequentially.
"Let me be very clear," she said. "We had 10% to 15% out there because that's
what we saw and we had good visibility. We were tracking pretty well in the
first two months of the year. When (our review) convinced us that we could not
be at the high end of the range, we (felt it appropriate to) modify our revenue
view."
Russo blamed the revision on further constrictions on capital spending by
North American wireline communications carriers. The wireless market continues
to be a source of sales growth.
While Lucent has said it will make changes necessary to its business to keep
it inline with the market, Russo said it is too early to discuss further large
job cuts.
"I think that's very premature," she said. "What we've said is in the normal
course of business, we will make the appropriate adjustments to our business.
What we also said it given that we are in a dynamic industry, it is important
that we stay close to the market. We are taking a look at what, if any,
additional actions are necessary to align our business" with the market.
Lucent also announced that it would take a six-cent per share loss in the
second quarter due to a recently passed law relating to an extension of
operating loss carrybacks.
D'Amelio said the cash benefit to Lucent for taking the charge in the
company's second quarter will "generate a significant cash benefit to Lucent."
"The net is, if you look at the cash piece, it is significantly better than
the six cents (per share charge)," he said.
D'Amelio said the company has not yet determined in which quarters the cash
benefit will fall.
Meanwhile, Lucent Chairman Henry Schacht said the fact that the company still
sees improving revenue during a tough quarter should give the company some
credibility.
"The fact that we're seeing an up quarter and the fact that we've made
quarter-to-quarter progress for five straight quarters is a tribute to everyone
here," he said.
-Johnathan Burns, Dow Jones Newswires; 201-938-2020;
johnathan.burns@dowjones.com
(END) DOW JONES NEWS 03-12-02
12:58 PM |
