Lucent Narrows Losses In Fourth QuarterLucent Narrows Losses In Fourth Quarter

The ailing telecommunications industry took another heavy blow Wednesday as Lucent Technologies Inc. reported dismal fourth-quarter and year-end losses.

For its fourth quarter ended Sept. 30, Lucent posted revenue of $2.3 billion, down 23% from third-quarter revenue of $2.95 billion and 56% lower than the $5.2 billion it reported in the year-ago quarter. The company's net loss was $2.8 billion, or 84 cents per share, an improvement over last year's fourth-quarter net loss of $8.8 billion, or $2.59 per share.

For the year overall, Lucent posted revenue of $12.3 billion but reported a loss of $11.8 billion, or $3.51 per share. In 2001, revenue was $21.3 billion with a loss of $16.2 billion, or $4.77 per share. That includes all charges, such as restructuring.

The earnings report comes on the cusp of last week's announcement in which Lucent said it would cut another 10,000 jobs. Future cutbacks may assist the company in reaching its goal of being profitable by the end of 2003, despite the fact that Lucent executives have already forecast that first-quarter revenue will be down as much as 10% over the previous year. "We have clearly demonstrated our ability to significantly reduce costs and expenses, and we will continue to improve the way we run the business by streamlining the processes we use with our customers and driving greater efficiency through improvements in supply-chain and information systems," CFO Frank D'Amelio said in a statement.

Lucent isn't alone in its woes, analysts say, and the future doesn't look bright for telecom equipment vendors because the market for their products has shown no sign of rebound. "From where we sit, the carrier spending still isn't picking up, and in fact it's still slowly declining," says Michael Howell, a principal analyst at Infonetics. "That affects all the big companies who compete in this market. Cisco would be in the same bag if they didn't have such a large enterprise base."

Lucent said it expects to end fiscal 2003 with more than $2 billion in cash without drawing any further credit.