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

To: R.E.B. who wrote (17548)	1/23/2001 6:47:45 PM
From: EL KABONG!!!	Read Replies (1) \| Respond to of 21876

interactive.wsj.com January 23, 2001 Lucent Plans Layoffs, Huge Charge For Fiscal 2nd Quarter, Analysts Say By SHAWN YOUNG Staff Reporter of THE WALL STREET JOURNAL Lucent Technologies Inc. is planning a restructuring charge of more than $1 billion and 10,000 job cuts, according to Wall Street analysts who follow the company. The company is expected to announce the moves Wednesday, when it releases earnings for the fiscal first quarter ended Dec. 31, the analysts say. Most analysts said they are expecting the charge, which could include writeoffs for inventory, discontinued products, real-estate, plant closings and defaults on debts by customers, to be between $1 billion and $2 billion. Such a charge, which Lucent would take in the current second quarter, could approach or exceed the giant telecommunications-equipment maker's net income from continuing operations for fiscal 2000, which was $1.68 billion, including one-time items. A Lucent spokeswoman declined to comment on the analysts' forecasts. "I certainly wouldn't be surprised to see a charge of $1 billion or more," said ING Barings analyst Tom Luria. "The restructuring will be big and complex with a charge to match." The Murray Hill, N.J., company is trying to recover from a disastrous year in which it fired its chairman and chief executive after a string of earnings disappointments that has sent its stock down more than 80%. In October Lucent reinstated former Chairman and Chief Executive Henry Schacht, who says Lucent erred by pushing for faster growth than it could sustain at the same time it was beginning to feel the effects of its failure to anticipate demand for ultra-fast optical-networking gear. Now Lucent must also contend with a projected slowdown in spending by telecommunications companies. The company is now struggling to contain costs that got out of control as internal forecasting systems faltered under the strain of meeting overly ambitious short-term targets. The job cuts that will be a major part of Lucent's plan to cut costs by $1 billion this year will come from a mixture of layoffs and attrition, with layoffs accounting for the majority, say people familiar with the matter. The cuts should total nearly 10% of Lucent's work force of 106,500, excluding the 16,500 employees of the Agere microelectronics unit the company plans to spin off this year. Although the company has said more charges are possible later in the year, this restructuring announcement is a big opportunity for Lucent to clean house. "If I were them, I'd write off everything that wasn't tied down," said Sanford C. Bernstein analyst Paul Sagawa. "They get a freebie here and I think they'll take it." Investors poring over the company's results and projections will be looking for "evidence that they're taking positive steps," said Mr. Sagawa. Such evidence would include progress in optical networking, including possibly the addition of WorldCom Inc. as an optical customer; focus on finding a permanent replacement for Mr. Schacht, who is serving temporarily; and sound restructuring plans governed by an improved sense of strategic direction, analysts said. Potential investors will also be looking carefully at Agere's results for reassurance that the spinoff will be a success. Mr. Luria said he is expecting the unit to post revenue growth of 59%, as it did in the fourth quarter. Most analysts are hoping to hear Lucent's projections for the remainder of the year, but some say it's possible the company won't elaborate on its existing forecast that it will show consistent quarter-over-quarter improvement for the rest of the year, with growth catching up to industry levels next year. Failure to provide more detailed guidance would not be good, said Lehman Brothers Inc. analyst Steven Levy. "It would certainly be viewed negatively." The company should at least be able to provide projections for the current second fiscal quarter, said UBS Warburg analyst Nikos Theodosopolous. The current First Call/Thomson Financial consensus estimate, which doesn't include any charges, is that the company will lose nine cents a diluted share in the second quarter and 22 cents in fiscal 2001. The First Call estimate for the first quarter is a loss of 27 cents, in line with the company's announcement in December that it would post a loss of 25 cents to 30 cents a diluted share on revenue of about $6.3 billion. Lucent's stock fell 19 cents to $18.88 in 4 p.m. New York Stock exchange composite trading Tuesday. Analysts said institutional investors have drastically curtailed their holdings in Lucent, but some will be looking for encouraging signs that it is time to buy the stock again at depressed prices. "I do think it's a stock that people are looking for a reason to buy," said Mr. Theodosopolous, "but the reasons have to be real." Write to Shawn Young at shawn.young@wsj.com KJC

To: R.E.B. who wrote (17548)	1/24/2001 10:35:59 AM
From: John Soileau	Read Replies (1) \| Respond to of 21876

They just finished the conf call, you can hear it all at www.lucent.com. A few notes I scribbled: Micro sales +50% over prior year, US 43% other 55% gross margin 22%, down 15% from FY2000 R & D +39.5% to $1.3 bn loss is 1.7 bn for Q receivables -23.8%, sold $600m in vendor credit rec, and $500m in recourse notes inventories ++ in Q but working hard on it cash from ops -$1.1 bn in Q, not acceptable (I'll say!) new exec just to oversee cash flow, big emphasis on that, reports directly to D Hopkins exec comp tied to operational performance closemouthed on AGERE due to impending IPO Big win with Telefonica, but will involve new vendor financing $1.6 bn liquidity--arranging a new facility 7 point plan to get on track, will be felt in 2hd half International sales under Mike Butcher "on a tear" problems are with North Am operations-- serv provider business down in all lines but optical fiber HS sees "improved sales" this Q, wouldn't elaborate further HS sees sequential growth top line and bottom line No comment on Worldcom deal-- they are "working hard" on it and will get back to us ASAP headcount reduction: 123K less 16.5K AGERE less 10K rif less 6K contract mfturing=about 90K empl turnover actually down from Sept Q seeing 50%growth in optical fiber component shortage, not capacity shortage caused trouble. No probs with capacity regular div declared, no stock buyback sales of OC192: on trial, doing will, like what they see, no more detail sales of 7RE--"excited' about it management--assembled very good exec staff, confident in them, working hard to fix co. no news yet on perm CEO, will let us know when it happens stock opened up and was ticking up on high volume during most of the call. John