Lucent earnings:
(PR NEWSWIRE) Lucent Reports Record 4th Quarter Increases OF 17.2 Percent for
44.7 Percent for Net Income - Excluding One-Time Charges for Octel
Acquisition
COMPANY ALSO REPORTS RECORD FISCAL YEAR INCREASES OF 13.2 PERCENT FOR
REVENUE AND 43 PERCENT FOR NET INCOME - EXCLUDING ONE-TIME CHARGES
Lucent Technologies today reported revenues increased 17.2 percent in the
quarter ended September 30, 1997, to $6.933 billion -- and net income
increased 44.7 percent to $369 million, or 57 cents per share, excluding
one-time charges associated with the company's acquisition of Octel
Communications Corporation.
The company's revenues for the fiscal year ended September 30, 1997 were
$26.360 billion, an increase of 13.2 percent over the previous 12 months. For
the 12 months ended September 30, 1997, Lucent's net income rose 43 percent to
$1.507 billion or $2.34 a share, excluding one-time charges associated with
the Octel acquisition. This compares to net income of $1.054 billion or $1.65
per share on a pro-forma basis* in the 12 months ended September 30, 1996,
excluding business restructuring and other charges taken in December, 1995.
Including charges associated with Octel, the company reported a loss for the
fourth quarter of $597 million or 92 cents per share. For the same period last
year, Lucent reported net income of $255 million, 0r 40 cents per share on revenues of $5.918 billion. When the Octel charges are included for the fiscal
year ended September 30, 1997, Lucent earned net income of $541 million or 84
cents per share.
"This is a great finish to our first fiscal year as an independent company,"
said Richard McGinn, Lucent Technologies CEO and President. "We believe these
results demonstrate the enormous growth opportunities in the communications
industry, and that our focus on the industry's fastest growing segments is
paying off."
Revenues for the company's core businesses** increased 19.4 percent in the
quarter. Revenues increased 17.8 percent for Systems for Network Operators; 21
percent for Business Communications Systems; 23.9 percent for Microelectronic
Products and 1.6 percent for Consumer Products, compared to the year-ago
quarter.
"Lucent is continually and quickly strengthening our business for growth,"
said McGinn. "Just in the past few weeks we've completed our acquisition of
Octel, announced plans to acquire Livingston Enterprises, added to our growing
data networking portfolio for businesses and service providers, and created
the joint venture with Philips for the consumer terminal market. We intend to
continue that pace to address a rapidly changing - and fortunately for us -
rapidly growing industry."
Review of Operations
SYSTEMS FOR NETWORK OPERATORS
Revenues increased 17.8 percent over the year-ago quarter to $3.879 billion,
led by sales of switching and wireless systems with associated software. The
continuing demand for second lines in businesses and residences -- for uses
such as Internet services, data traffic and faxes -- contributed to the
group's increased quarterly revenues.
Domestic revenues increased approximately 14 percent for the final quarter
of 1997 in comparison to the same period in 1996, led by sales to traditional
service providers, and non-traditional customers including PCS (personal
communications services) wireless providers and competitive access providers.
International sales increased approximately 33 percent over the year-ago
quarter, including increases in the Caribbean/Latin American region, the
Europe/Mid-east/Africa region, and in China. International sales represented
approximately 24 percent of revenues for the quarter.
Comparing the 12 months ended September 30, 1997 to the comparable year-ago
period, the group's revenues increased 18.4 percent to $15.614
billion.
**This includes revenues from Lucent's Systems for Network
Operators, Microelectronic Products and Business
Communications Systems businesses. It excludes revenues
from the company's Consumer Products business and from
Other Systems and Products.
MICROELECTRONIC PRODUCTS
Revenues increased 23.9 percent over the year-ago quarter to $782 million,
led by increased sales of customized chips for computing and communications,
including components for wireless telephones, local area networks, data
networking, and high-end computer workstations. Increased sales of power
systems and optoelectronic components also contributed to the quarter-over
quarter increase.
Domestic revenues increased about 19 percent and international revenues
increased approximately 29 percent compared to the year-ago quarter. The
international increase was led by continued strength in the European and
Asia/Pacific regions. International revenues represented approximately 49
percent of revenue for the quarter.
Comparing the 12 months ended September 30, 1997 to the comparable year-ago
period, the group's revenues increased 19 percent to $2.755 billion.
BUSINESS COMMUNICATIONS SYSTEMS
Revenues increased 21 percent to $1.811 billion compared to the year-ago
quarter, with increases in both domestic and international sales.
The group's results were primarily driven by increased sales of the DEFINITY
enterprise communications server, SYSTIMAX Structured Cabling Systems,
messaging systems, integrated offers such as call centers, and higher revenues
from services contracts. Domestic revenues were up approximately 22 percent
and international revenues increased approximately 18 percent versus the
year-ago quarter. International sales represented approximately 17 percent of
revenue -- with expanded sales in all international regions.
Comparing the 12 months ended September 30, 1997 to the comparable year-ago
period, the group's revenues increased 16.4 percent to $6.411
billion.
CONSUMER PRODUCTS
Revenues increased 1.6 percent over the year-ago quarter to $316 million.
Since the beginning of the calendar year, the group has launched 26 new
products into the marketplace, contributing to the increased sales levels. Now
that its consumer products business has become part of Philips Consumer
Communications (PCC), Lucent will no longer report "consumer products"
revenues, but will report its share of the earnings from the venture as a
component of "other income."
COSTS AND EXPENSES:
Gross margin for the quarter was 44.1 percent (excluding one-time charges
associated with the Octel acquisition), up from 43.5 percent in the year-ago
quarter.
Excluding the Octel charges, selling, general and administrative expenses
(SG&A) were 23.2 percent of revenues in the quarter, compared with 24.2
percent in the year-ago period. The SG&A expenses were reduced by a reversal
of business restructuring reserves of $105 million. SG&A expenses increased
over the prior quarter, primarily due to higher sales levels, investments in
growth initiatives, and implementation of SAP, an integrated software
platform.
Research and development (R&D) expenses, excluding the Octel charges,
increased 22.4 % over the year ago quarter. This increase was primarily due to a $127 million write down of Bell Labs assets, as well as increased
spending to support wireless infrastructure and microelectronics products. As
a percent of revenues, quarterly R&D spending, excluding the Octel charges,
increased one-half of one percentage point.
Lucent Technologies 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
Laboratories is the research and development arm for the company.
*PRO-FORMA - The company's results for the 12 months ended
September 30, 1996 are calculated on a pro-forma basis,
as though the total shares outstanding immediately following the
IPO had been issued in the first quarter of calendar
year 1995. The company did not receive the proceeds from the
sale of IPO shares until April 1996.
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