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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: H.A.M. who wrote (12847)	1/20/2000 6:42:00 PM
From: Diamond Jim	Respond to of 21876

re: "The issue now is whether they can convince the Street that they can make the turnaround beginning in the third quarter," said Michael Geran, analyst with Pershing division of Donaldson Lufkin & Jenrette. "Basically, they were in line with the revised expectations. Their shortfalls were where they were expected to be." -- Wasn't the quarter already over when McGinn fessed up? They ought to be able to hit a fixed number.

To: H.A.M. who wrote (12847)	1/20/2000 7:13:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 21876

Citing George Hunt... hee hee... I'm sorry, that makes me laugh. OG

To: H.A.M. who wrote (12847)	1/20/2000 8:39:00 PM
From: H.A.M.	Read Replies (4) \| Respond to of 21876

Lucent First-Quarter Profit Falls 23% as Sales Stall Murray Hill, New Jersey, Jan. 20 (Bloomberg) -- Lucent Technologies Inc., the world's No. 1 phone-equipment maker, said fiscal first-quarter profit fell 23 percent as sales stalled on lower demand for some products and delayed shipments of others. Profit from operations for the quarter ended Dec. 31 dropped to $1.18 billion, or 36 cents a share, from $1.52 billion, or 48 cents, in the year-ago period. Lucent said in a warning two weeks ago that profit was 36 cents to 39 cents a share. Sales were little changed at $9.91 billion compared with $9.84 billion. Lucent sold less software than it expected and didn't get new fiber-optic equipment out fast enough, opening the door for Nortel Networks Corp. and Ciena Corp. Lucent said it expects delays to be resolved by the end of the current quarter as it unveils new products and ramps up production. ``Lucent's going to need to play catch-up in the optical market,' said Brian Miller, an analyst at Invesco Funds Group, which owns Lucent shares in the $2.5 billion Invesco Telecommunications Fund. Shares of Murray Hill, New Jersey-based Lucent rose 2 1/2 to 53 5/8 on the New York Stock Exchange before the earnings report. They dropped to 52 1/2 after the release. The stock has fallen about 9 percent in the past 12 months. Analysts polled by First Call/Thomson Financial were expecting profit of 37 cents. Before the warning, most expected sales of about $11 billion. Resolving Shortages Chairman and Chief Executive Richard McGinn said he's taking steps to resolve the problems that caused the profit drop in the recent quarter. He predicted that sales will climb ``in the range of 17 percent' this fiscal year, which ends in September, after rebounding in the second half. ``The industry demand seems to be intact,' said David Heger, an analyst at A.G. Edwards & Sons Inc. who rates Lucent a ``buy.' ``But they've got their work cut out for them.' McGinn said revenue in the current quarter will increase to about $10 billion from $8.78 billion a year earlier. Much of the shortfall in the first quarter came as Lucent failed to deliver some new fiber-optic products and couldn't make enough of some others. McGinn said the addition of new technicians plus a tripling of capacity to manufacture its next generation of fiber-optic transmission systems, known as OC-192, will alleviate the constraints by the end of the second quarter. Doubling Capacity Lucent will double its OC-192 capacity again in the fiscal third quarter and expand its production of fiber-optic components, many of which it sells to competitors, to end shortages by the end of March. The company also expects to complete shipments that customers, mainly one in Saudi Arabia, put off in the first quarter by the end of the fiscal year. It blamed the profit decline in part on those delays. McGinn forecast a doubling of sales this year of wave- division multiplexing, or WDM, products that boost capacity on fiber-optic networks. With transmission systems included, sales of all Lucent's fiber-optic equipment will climb 40 percent in fiscal 2000. ``We're seeing good growth across a number of areas in the business that are leading growth segments for the industry,' McGinn said. Bad Timing Sales to service providers, the companies that run telephone and data networks, fell 2 percent from a year earlier to $6.22 billion. Lucent blamed the drop on its failure to correctly time a shift by customers to new fiber-optic technology, the decline in software sales and shipment delays. Revenue from voice switches and wireless gear, two of Lucent's main businesses, fell from a year ago. McGinn said the company will recover in those markets and increase sales of voice switches by at least 10 percent and wireless equipment by more than 21 percent this year. Sales to corporations and government agencies rose 4 percent to $2.01 billion in the first quarter. Revenue from chips and other microelectronic products rose 17 percent to $1.51 billion. Gross margin, or the percentage of total sales left after production costs are subtracted, narrowed to 46.9 percent from 53 percent. Lucent said the drop was due largely to a decline in software sales. ``That leads me to believe the shortfall in software revenues was larger than I expected,' said David Powers, an analyst at Edward Jones & Co., who rates Lucent a ``buy.' Overall sales in the U.S. rose 5 percent, Lucent told investors and financial analysts on a conference call. Sales from outside the U.S. fell 8 percent, reversing a trend. Net income, including a $115 million gain on the sale of an investment and $40 million charge for costs associated with the acquisitions of International Network Services, Excel Switching Corp. and Xedia Corp., was $1.25 billion, or 38 cents a share. That compares with net income of $2.54 billion, or 80 cents a share, including an $842 million gain and charges of $287 million in the year-ago period. Results in the year-ago period were restated to reflect the acquisitions of International Network Services and Excel. Lucent had restated them before to reflect other acquisitions.