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

To: Joe S Pack who wrote (15457)	7/20/2000 11:06:32 PM
From: Joe S Pack	Read Replies (2) \| Respond to of 21876

LU Management shakeup on card. Is Mr. McGinn on his way out? Source: dailynews.yahoo.com UPDATE 4-Lucent posts loss, cuts growth outlook (adds details in paragraphs 2,25, updates stock price) By Jessica Hall NEW YORK, July 20 (Reuters) - Lucent Technologies Inc.<LU.N>, the world's largest telecommunications equipment maker, on Thursday posted a third-quarter loss and cut its revenue and profit growth outlook, sending its stock down 16 percent. Lucent also announced the long-expected spin-off of its microelectronics unit, which makes optical components and semiconductors. The spin-off will allowLucent to focus on making equipment for data, wireless and fiber-optic networks. The company said it will make management changes within the next 10 days. Lucent reduced its growth forecasts because its efforts to boost production of newfiber optic products were taking longer than originally planned, and sales of traditional telephone switches were falling fast then expected. Shares of Murray Hill, N.J.-based Lucent, whose quarterly operating profits slightly topped Wall Street expectations, fell 10-5/15 to 54-3/8 in heavy trading on the New York Stock Exchange. The company has been working to rebuild investors' confidence since it posted a23 percent drop in first-quarter profits due, in part, to its inability to manufacturenew-generation products fast enough to keep up with robust customer demand. Lucent admitted it failed to gauge customers' quick shift toward high-speed fiberoptic products and it fell behind rivals such as Nortel Networks Corp. <NT.N><NT.TO>. Catching up has been more difficult and time-consuming than Lucent planned. "This is a case of management-execution issues related to getting products outon a timely business and trying to grow the company at a pace that it is naturallyable to grow. This is not a situation that you can turn around overnight," said Lehman Bros. analyst Steve Levy. "In the near-term, there's some real problems. The guidance suggests that thoseproblems persist and in some cases may have worsened," said Robertson Stephens analyst Paul Silverstein. "In the long-term, the communications-market outlook is extremely good. Lucent's having execution difficulties now, but long-term there's value here," Silverstein said. THIRD-QUARTER RESULTS TOP WALL STREET EXPECTATIONS For the third quarter ended June 30, Lucent posted a net loss of $301 million, or 9 cents a share, due to charges for the corporate telephone system being spun off and recent acquisitions. In the year-earlier quarter, Lucent earned $763 million, or 24 cents a share. ...... "Spinning off micros is exactly the right thing to do...There's a lot of value to be unlocked here," said Robertson Stephens analyst Paul Silverstein. The chip and component operations, as well as the previously announced spinoff of the Avaya corporate phone unit, could be worth about $75 billion to $100 billion, Silverstein estimated. Lucent plans to launch an initial public offering of up to 20 percent of the microelectronics unit in the first calendar quarter of 2001. The remaining sharesare expected to be spun off by next summer. Lucent expects the microelectronics unit, which provides components and other products to Lucent's rivals, will be able to grow faster on its own since it will no longer be constrained by any ties to the parent company. "We will create two vibrant new companies positioned to lead in the Internet infrastructure and communications semiconductor markets. The fact is, we are dividing Lucent in order to accelerate growth," said Lucent Chairman Rich McGinn. Lucent's Avaya unit, which makes corporate switchboard operations, cablingsystems for corporate campuses and technology for operator call centers, is set to be spun off from the company by October. -Nat