Lucent's 'Nice Margin Improvement'
Forbes.com staff, 01.22.04, 2:15 PM ET
NEW YORK -
According to Deutsche Bank, Lucent's (nyse: LU - news - people ) first-quarter earnings report demonstrated "nice margin improvement," but the research outfit said it still would not revise its "sell" rating for the stock. Lucent Jan. 21 reported quarterly net profit of $349 million, or 7 cents per share, up from a year-earlier loss of $389 million, or 11 cents per share. Excluding one-time items, the first-quarter profit was 3 cents per share. Thomson One Analytics had forecast a loss per share before special items of 1 cent. Lucent said its gross margin for the quarter stood at 41% of revenue, contrasting with 43% in the fourth quarter of fiscal 2003. Deutsche Bank praised "solid" results in the company's mobile and wireline equipment divisions but complained that the "expense reductions were not as good as advertised." The research firm calculated that Lucent's operating expenses declined $42 million, to $633 million; however, adjusting for lower depreciation and rising pension income, Deutsche Bank estimated that the real operating expense decline was probably closer to $10 million. The firm said it continues to favor Nortel (nyse: NT - news - people ) for investors seeking large-cap telecom exposure. Lucent was down 34 cents at $4.08, and Nortel was down 34 cents at $6.49.
PS Nortel will be under a lot of pressure for better margins than LU. Think they will deliver? |
