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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: J.T. who wrote (5676)	12/21/2000 3:18:58 AM
From: J.T.	Read Replies (1) \| Respond to of 19219

LU - here we go again... Lucent to Take Charge, Restate 4th-Qtr, Person Says By Erik Schatzker Murray Hill, New Jersey, Dec. 21 (Bloomberg) -- Lucent Technologies Inc., whose shares have fallen 78 percent this year as profit tumbled, plans to take a charge of at least $1 billion for slashing jobs and to restate its fiscal fourth-quarter sales a second time, according to a person familiar with the situation. Lucent will disclose the charge and restatement as early as today, as well as lower projections for profit and sales in its first quarter, the person said. Lucent had expected sales to drop 7 percent and earnings to break even in the quarter ending Dec. 31 until it pulled the forecasts a month ago. Chairman and Chief Executive Henry Schacht is counting on a restructuring that may include thousands of job cuts to return Lucent to profitability. Under his predecessor, the ousted Rich McGinn, the biggest maker of phone equipment cut four quarters of profit forecasts in less than 10 months and predicted its first- ever decline in sales. ``This marks the beginning of a very bad 2001 for Lucent,'' said Tom Lauria, an analyst at ING Baring Securities Inc., when told of the plans. ``It's unclear how successful these efforts will be.'' Lucent is waiting for a final headcount this quarter to finish calculating the number of positions it needs to eliminate, the person said. Lauria, who rates the shares ``hold,'' said he expects the company to cut about 10,000 jobs, largely in areas such as voice switching, public relations, finance and sales. Lucent spokeswoman Kathy Fitzgerald said the company plans to make an announcement this week explaining its sales restatement. She declined to comment further. Charge Planned Lucent has said it planned to take a charge and disclose the amount by the end of this quarter. Chief Financial Officer Debby Hopkins is in charge of the restructuring. The charge will be big enough to cover any potential job cuts as well as other elements of the restructuring, the person said. It's the latest development to stem from the string of profit disappointments that plagued the AT&T Corp. spinoff this year. Having beat profit estimates 15 quarters in a row, Lucent shocked Wall Street in January when it said earnings in the first quarter of fiscal 2000 missed its own forecast by a third and told analysts to lower estimates for the second quarter. Lucent stock, up 1,147 percent from its April 1996 initial public offering as recently as Dec. 9, 1999, plunged 23 percent the next day. McGinn brought in CFO Hopkins from Boeing Co., where she also was financial chief, to help put Lucent back on track. By the time Lucent warned on July 20 that profit in the fourth and first quarters were going to fall short, the company's shares had fallen 14 percent since December and Hopkins was talking about a restructuring and related charge. Initially, she planned to make changes to eight processes -- from supplier management to closing the books -- to reduce inventories and speed up collection of receivables. That extended to possible job cuts by Oct. 23, when McGinn was ousted and Schacht returned to the company he ran as CEO until October 1997. Investigation On his first day back, Schacht had to slash forecasts for sales and profit in the first quarter. A month later, he withdrew the projections and restated results in the fourth quarter that ended on Sept. 30, cutting sales by $125 million and profit by 2 cents a share. Lucent hired PricewaterhouseCoopers LP and Cravath, Swaine & Moore to help investigate why revenue in the fourth quarter was recorded improperly and determine any further restatements. Based on the results of that investigation, Lucent will reduce sales in its fourth quarter from a restated $9.234 billion and doesn't expect to restate revenue in any previous quarters, the person said. Lucent is currently expected to lose 1 cent a share in the quarter ending Dec. 31, the average estimate of analysts in a First Call/Thomson Financial poll. The estimates range from profit of 3 cents to a loss of 8 cents. Shares of the Murray Hill, New Jersey-based company fell $1.88 to $15.50 yesterday. Best regards, J.T.