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Lucent Technologies Revenues Increase 23 Percent To a Record $10.575 Billion in Fourth Fiscal Quarter
- Net Income Up 50 Percent in the Quarter, Excluding One-Time Events
- Revenues for Fiscal 1999 Exceed $38 Billion
MURRAY HILL, N.J., Oct. 26 /PRNewswire/ -- Lucent Technologies (NYSE: LU - news) today announced that revenues for its fourth fiscal quarter ended September 30, 1999 increased 23 percent to a record $10.575
billion. Revenues in the fiscal 1998 period were $8.574 billion.
Net income increased 50 percent over the year-ago quarter to $972 million or 31 cents a share, excluding one-time events (See Note a).(a) Net income for the year-ago quarter was $647 million or 21 cents a share,
excluding one-time events (See Note b).
For the fiscal year ended September 30, 1999, revenues increased 20 percent to $38.303 billion. This compares with revenues of $31.806 billion in fiscal 1998. Net income rose 46 percent to $3.833 billion or $1.22 a
share for the fiscal year, excluding one-time events (see Note a - 12 mo. table). This compares with net income of $2.619 billion or 86 cents a share for fiscal 1998, excluding one-time events (see Note b - 12 mo. table).
``Lucent enters the new millennium with momentum,' said Richard McGinn, Lucent Technologies chairman and chief executive officer. ``This was the strongest quarter and the strongest year in Lucent's history. We
delivered on and exceeded our commitment to grow the top-line by 19 to 20 percent and earnings per share by 35 percent, excluding one-time events.
``Our ability to provide customers with the systems, software, silicon and services they need to build end-to-end next-generation networks continues to win Lucent new business and strengthen our relationships with
existing customers,' said McGinn. In fiscal 1999, Lucent announced more than $11 billion in contract wins, including more than $2 billion in September alone.
McGinn noted that Lucent's growth in the fourth quarter was again driven by the company's focus on hot growth areas like optical networking, wireless networking, data networking and professional services.
The company's microelectronics business also continued its strong growth, with revenues of nearly $1 billion in the quarter. ``Communications systems are replacing PCs as a driver of the semiconductor industry,' said
McGinn, ``and Lucent is a leader in this chip technology.'
Lucent's revenues outside the U.S. grew 38 percent in the quarter and 47 percent for the fiscal year. In fiscal 1999, Lucent's revenues outside the U.S. accounted for 32 percent of sales, up from 23 percent when Lucent
became an independent company. ``I'm very encouraged by our continued progress in growing Lucent's customer base outside the U.S.,' said McGinn. Lucent announced more than 60 contracts outside the U.S. in
fiscal 1999.
Results Including One-Time Events - Three Months and Twelve Months
Including a $274 million pre-tax ($167 million, after-tax) gain on the sale of an investment in Juniper Networks and $258 million in pre-tax ($191 million, after-tax) one-time costs associated with Ascend, Livingston and
Nexabit (See Note a), the company reported net income of $948 million, or 30 cents a share for the quarter. In the year ago quarter, the company reported net income of $220 million, or 7 cents a share, including
one-time events (See Note b). Results for both the 1999 and 1998 quarters include reversals of business restructuring charges of $54 million, pre-tax ($36 million, after-tax) and $17 million pre-tax ($11 million,
after-tax), respectively.
For the twelve months ended September 30, 1999, including one-time events (see Note a - 12 mo. table), the company reported net income of $4.766 billion or $1.52 a share versus net income of $1.035, or 34 cents a
share in fiscal 1998, also including one-time events (see Note b - 12 mo. table). Twelve-month results for fiscal 1999 and 1998 include reversals of business restructuring reserves of $141 million pre-tax ($93 million,
after-tax) and $118 million pre-tax ($76 million, after-tax) - including an $18 million, pre-tax reversal of merger-related costs by Ascend - respectively.
Review of Operations - Three Months Ended September 30, 1999
For the quarter, revenues for systems for network operators increased 32 percent to $6.917 billion, revenues for business communications systems were essentially unchanged from a year-ago at $2.471 billion, and
revenues for microelectronic products increased 22 percent to $991 million.
SYSTEMS FOR NETWORK OPERATORS
Revenues increased by 32 percent over the year-ago quarter to $6.917 billion, driven by sales of optical networking systems, wireless systems, data networking systems for service providers, 5ESS© switching systems,
communications software and services.
Revenues were led by sales to local exchange carriers, wireless service providers and long distance carriers. Strong demand for reliable voice, data and wireless services and the need for increased network capacity
continued to drive the group's revenues.
Within the U.S., revenues increased by about 20 percent over the year-ago quarter. Revenues outside the U.S. increased about 59 percent and represented approximately 35 percent of the group's revenues for the
quarter.
For the 12 months ended September 30, 1999, revenues increased 24 percent to $25.208 billion.
BUSINESS COMMUNICATIONS SYSTEMS
Revenues were essentially unchanged from a year ago at $2.471 billion. Increased sales of the Definity Enterprise Server© to large businesses -- including those with call center applications -- and NetCare© services
were largely offset by decreased sales of Systimax© structured cabling systems.
Within the U.S., revenues decreased 1 percent over the year-ago quarter. Revenues outside the U.S. increased about 8 percent and represented approximately 21 percent of the group's revenues.
For the 12 months ended September 30, 1999, revenues grew 5 percent to $8.585 billion.
MICROELECTRONIC PRODUCTS
Revenues increased 22 percent over the year-ago quarter to $991 million, driven by strong sales of optoelectronic components and power systems, as well as increased sales of customized chips for high-speed
communications, data networking systems, and wireless systems.
Within the U.S., revenues increased 41 percent over the year-ago quarter. Revenues outside the U.S. increased about 5 percent and represented approximately 45 percent of the group's revenues.
For the 12 months ended September 30, 1999, revenues rose 18 percent to $3.565 billion.
COSTS AND EXPENSES
As a percentage of revenue, gross margin, excluding one-time events, was 46 percent for the fourth fiscal quarter, compared with 48.2 percent in the year-ago quarter, reflecting a change in product mix.
Selling, general and administrative expenses (SG&A), excluding one-time events, accounted for 21.3 percent of revenues in the quarter, compared to 23 percent in the period a year-ago.
Research and development (R&D) spending, excluding one-time events, increased 8 percent over the year-ago quarter and accounted for 10.7 percent of revenues in the quarter, compared with 12.2 percent during the
1998 period.
Net income for the quarter, excluding one-time events, was driven by revenue growth and by a decrease in the company's effective tax rate to 33.7 percent, compared to 35 percent in the year-ago quarter.
Lucent Technologies, headquartered in Murray Hill, N.J., designs, builds and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone
systems and microelectronic components. Bell Labs is the research and development arm for the company. For more information on Lucent Technologies, visit the company's web site at lucent.com.
This news release contains forward-looking statements based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially.
These risks and uncertainties include price and product competition, dependence on new product development, reliance on major customers, customer demand for our products and services, the ability to successfully
integrate acquired companies, readiness for Year 2000, the impact of Year 2000 on customer spending habits, control of costs and expenses, international growth, general industry and market conditions, growth rates
and general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations. For a further list and description of such risks and uncertainties, see the reports filed by Lucent
with the Securities and Exchange Commission. Lucent disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
(a) All earnings per share reported in this release are Diluted EPS and
reflect the effect of a two-for-one stock split effective
April 1, 1999.
LUCENT TECHNOLOGIES
Fourth Fiscal Quarter Income Statement
(Unaudited; Millions of Dollars, except per share amounts)
For Three Months Ended
9/30/99 9/30/99(a) 9/30/98(b) Change(c)
Revenues 10,575 10,575 8,574 23.3%
Costs 5,778 5,706 4,443 28.4%
Gross Margin 4,797 4,869 4,131 17.9%
Selling, General
and Administrative 2,423 2,251 1,972 14.1%
Research and
Development 1,145 1,131 1,050 7.7%
Total Operating
Expenses 3,568 3,382 3,022 11.9%
Operating Income 1,229 1,487 1,109 34.1%
Other Income
(Expense), net 366 92 (43) NM
Interest expense 114 114 71 60.6%
Income before
income taxes 1,481 1,465 995 47.2%
Income tax expense 533 493 348 41.7%
Net Income 948 972 647 50.2%
Earnings per
share - Basic 0.31 0.32 0.21 52.4%
Earnings per
share - Diluted 0.30 0.31 0.21 47.6%
Effective tax rate (%) 36.0 33.7 35.0 (1.3) pts.
(a) Excludes one-time, pre-tax costs of $258 million ($191 million,
after-tax) associated with asset impairments, integration-related
charges and merger expenses in connection with Ascend Communications
and Nexabit Networks business combinations. These costs principally
include the write-off of Livingston goodwill and existing technology,
certain product and system integration and direct merger expenses
related to Nexabit. In addition, excludes a $274 million pre-tax
($167 million, after-tax) gain on the sale of an investment in Juniper
Networks.
(b) Excludes one-time, pre-tax charges of $431 million ($427 million,
after-tax) for in-process research and development related to the
Company's acquisitions of SDX, MassMedia, LANNET, JNA and Stratus.
(c) Change is between the three-month period ending 9/30/99 and the
corresponding 1998 period, excluding one-time items.
NM - not meaningful
LUCENT TECHNOLOGIES
Fiscal Year Income Statement
(Unaudited; Millions of Dollars, except per share amounts)
For Twelve Months Ended
9/30/99 9/30/99(a) 9/30/98(b) Change(c)
Revenues 38,303 38,303 31,806 20.4%
Costs 19,688 19,616 16,715 17.4%
Gross Margin 18,615 18,687 15,091 23.8%
Selling, General
and Administrative 8,417 8,166 6,867 18.9%
Research and
Development 4,792 4,496 3,903 15.2%
Total Operating
Expenses 13,209 12,662 10,770 17.6%
Operating Income 5,406 6,025 4,321 39.4%
Other Income
(Expense), net 443 169 (21) NM
Interest expense 406 406 254 59.8%
Income before
income taxes 5,443 5,788 4,046 43.1%
Income tax expense 1,985 1,955 1,427 37.0%
Income before
cumulative effect of
accounting change 3,458 3,833 2,619 46.4%
Cumulative effect of
accounting change
(net of tax of
$842) 1,308 -- -- --
Net Income 4,766 3,833 2,619 46.4%
Earnings per
share - Basic:
Income before
cumulative effect
of accounting change 1.14 1.26 0.88 43.2%
Cumulative effect of
accounting change 0.43 -- -- --
Net income 1.57 1.26 0.88 43.2%
Earnings per share
- Diluted:
Income before cumulative
effect of accounting
change 1.10 1.22 0.86 41.9%
Cumulative effect of
accounting change .42 -- -- --
Net income 1.52 1.22 0.86 41.9%
Effective tax rate (%) 36.5 33.8 35.3 (1.5) pts.
(a) Excludes $101 million in one-time, non-tax impacting costs associated
with the Ascend and Nexabit mergers; $236 million of one-time pre-tax
costs ($169 million, after-tax) associated with asset impairments and
integration-related charges in connection with the Ascend
Communications and Nexabit Networks business combinations. These
costs principally include the write-off of Livingston goodwill and
existing technology, certain product and system integration and direct
merger expenses related to Nexabit. In addition, excludes
$282 million ($272 million after-tax) of one-time, in-process research
and development charges related to the company's acquisitions of
Stratus, Quadritek, Sybarus, WaveAccess and Enable; the gain on sale
of an investment in Juniper Networks of $274 million ($167 million,
after-tax) and a one-time, after-tax gain of $1.308 billion from the
cumulative effect of an accounting change to better represent pension
and post-retirement benefit expense.
(b) Excludes one-time, pre-tax charges of $1.683 billion ($1.679 billion,
after-tax) for in-process research and development related to the
Company's acquisitions of Livingston, Prominet, Yurie, Optimay, SDX,
MassMedia, LANNET, Stratus and JNA and the $149 million, pre-tax
($95 million, after-tax) gain on the sale of ATS.
(c) Change is between the twelve-month period ended 9/30/99, excluding
one-time items and the corresponding 1998 period, excluding one-time
items.
NM - not meaningful
SOURCE: Lucent Technologies |
