Lucent Technologies Inc. (www.lucent.com) announced Tuesday pro forma revenue of $3.5 billion for the first quarter of the 2002 fiscal year, which is ahead of guidance and raises the company over its own low point.
But the Murray Hill, New Jersey-based equipment vendor also reported that despite this glowing news, further job cuts could be expected at the company. Lucent, which has laid off nearly 45,000 staff over the past 12 months, will bring down the number of current employees from 62,000 to just fewer than 55,000 by June. The cuts would be made through two previously announced divestitures and outsourcing of some manufacturing operations in Massachusetts.
"We continue to believe that revenues in the first fiscal quarter of 2002 represented the low point for Lucent sales in the current market downturn," said Frank D'Amelio, Lucent's executive vice president and chief financial officer.
"For the second fiscal quarter, on a sequential basis, we expect our top line to improve approximately 10 percent to 15 percent and our bottom line to improve at an even greater rate," D'Amelio said.
And Lucent still plans to spin off microelectronics unit Agere, he added yesterday.
Lucent's first-quarter operating loss, before the income tax benefit and other items, was $1.28 billion, or a loss of 23 cents a share, compared with a loss of $2.1 billion, or a loss of 42 cents a share, the previous year.
After the benefit, its loss was $757 million, compared with a loss of $1.437 billion the previous year. Ongoing revenues fell to $3.47 billion from $3.8 billion in the year-ago quarter, and $4.8 billion in the previous quarter.
Lucent said last month that its first-quarter loss would be larger than Wall Street expected because of the prolonged spending slowdown in telecom. It said its loss from continuing operations would be between 23 cents and 26 cents a share on revenues ranging between $3.1 billion and $3.4 billion.
Lucent's net loss for the first quarter was $423 million, or 14 cents a share, compared with a year-ago net loss of $464 million or 14 cents a share. The 2001 net loss included a loss from discontinued operations, the effect of accounting changes and a one-time gain for the sale of a business.
The last revenue guidance from Lucent had been for a figure between $3.1 billion and $3.4 billion. The revenue in Q1 of fiscal year 2002, which ends Sept. 30, compares with $4.8 billion in the previous quarter and $3.8 billion in the same period last year. The pro forma loss per share from continuing operations was 23 cents. The loss per share in Q4 2001 had been 28 cents. It was 42 cents in Q1 2001.
In the next quarter, Lucent is aiming for margins "in the twenties," company officials said yesterday.
As a result of its cost cutting, Lucent expects that its break-even revenue will be $4.25 billion by the end of this fiscal year, down from $4.75 billion at present.
Lucent is in the throes of the second phase of a major restructure that aims to bring the company's expenses down by $4 billion. The first phase of the restructuring cut $2 billion off the total. This current phase has cut expenses by an additional $1.6 billion, the company announced.
The target for overall reduction in capex at Lucent is $750 million. It is said that a reduction of $50 million is still outstanding.
After rising as much as 8 percent, Lucent's stock closed up 1 cent at $6.70 in heavy New York Stock Exchange trading yesterday.
