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

To: Jack Colton who wrote (5763)	1/22/1999 12:21:00 AM
From: puborectalis	Respond to of 21876

Lucent Earnings Rise 26% By BLOOMBERG NEWS URRAY HILL, N.J. -- Lucent Technologies Inc. said Thursday that earnings before charges and gains rose 26 percent in the fiscal first quarter, more than analysts expected, but that sales growth lagged forecasts because the company could not complete the paperwork on some orders in time. The shares of the big manufacturer of telephone equipment fell 7.7 percent. Lucent has benefited as companies update their phone networks and look for a single big provider to supply all the equipment. The company, with about 55 percent of the North American phone-equipment market, is in a race with rivals like Northern Telecom Ltd. to provide a full range of products. Last week, Lucent agreed to buy Ascend Communications Inc., which makes networking equipment, for about $20 billion to expand its product line. While Lucent's profit has topped expectations since the company was split off from the AT&T Corporation, some investors said the delayed sales might indicate slowing demand. Lucent denied that contention. "Any time you see a shortfall in revenue, there's concern," said Bradley Williams, an analyst at Legg Mason Wood Walker Inc., who rates Lucent stock "outperform." Others, though, said the concern about revenue growth had not dimmed their expectations. "I'm inclined to give them the benefit of the doubt," said Michael Funsch, an analyst at Independence Investment Associates, which owns 4.82 million Lucent shares. "Management has exceeded all their projections they've given to us in the past." In the fiscal first quarter, which ended Dec. 31, profit before a charge and a gain climbed to $1.41 billion, or $1.05 a share, from $1.12 billion, or 86 cents a share, a year earlier. Analysts had expected earnings of $1.01 a share. Revenue, however, increased only 6 percent, below forecasts, to $9.2 billion from $8.72 billion. Lucent said more than $800 million in sales came in too late to be reported in the period. Lucent's shares fell $8.875, to $106.625, on the New York Stock Exchange today. The shares were the most active stock. The company's chief executive, Richard McGinn, said there had been no drop-off in consumer demand. The $800 million of equipment that could not be booked as revenue because of delays in completing paperwork was still delivered to the buyers, he said. The sales, all to phone companies in the United States, came in late in the quarter, and Lucent's accountants said the revenue had to be carried into the next period. "It would be a mistake to read it as any weakness in our business," McGinn said during a conference call with analysts and investors. If the $800 million in sales had been included, revenue in the first quarter would have risen 15 percent, close to the 16 percent increase of the prior quarter. The carried-over sales now are expected to help increase revenue in the fiscal second quarter by 30 percent and double Lucent's earnings from the year-earlier quarter, to 28 cents a share. The company expects sales in the full fiscal year to rise between 19 percent and 20 percent and per-share earnings to jump 35 percent, McGinn said. Including a gain and a charge, net income in the latest quarter was $2.71 billion, or $2 a share. A year ago, it was $792 million, or 61 cents a share.