Lucent Posts 1Q Loss, Predicts Rising RevenueLucent Posts 1Q Loss, Predicts Rising Revenue

Lucent Technologies Inc. reported Tuesday a first-quarter loss and revenue that was down 18% from a year ago, but the struggling telecommunications equipment vendor believes its sales slide has hit the low point.

"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," CFO Frank D'Amelio said in a statement. In the quarter, ended Dec. 31, Lucent earned revenue of $3.6 billion, compared with $4.3 billion in the same quarter last year.

D'Amelio said the vendor's fortunes should improve in the current quarter, in which it expects revenue will rise 10% to 15% compared with the most recent quarter.

Lucent's long march back to profitability should pick up speed as it continues slashing expenses as part of an ongoing restructuring, D'Amelio said. The cost cutting should lead the company back to profitability by the end of 2002, when quarterly revenue are predicted to reach $4.25 billion, he added.

For the latest quarter, Lucent posted a loss of $423 million, or 14 cents per share, compared with the $464 million loss sustained in the same period a year ago.

If Lucent had excluded results from the optical fiber business it sold and other write-offs, the company would have posted pro forma revenue of $3.5 billion for its latest quarter, compared with $3.8 billion in pro forma revenue in the same quarter a year ago. Last month, Lucent said it expected only $3.1 billion to $3.4 billion in pro forma revenue for the quarter just ended.

The company also narrowed its pro forma loss in the period to 23 cents a share, or $1.28 billion, after predicting a pro forma loss of 23 to 26 cents a share for the quarter. A year ago, the company's pro forma quarterly loss was 42 cents a share, or $2.07 billion.

The outlook for the telecom equipment market should pick up by the latter half of this year when telecom carriers start to significantly increase their equipment spending, says Marian Stasney, senior analyst at the Yankee Group consulting firm. When that happens, telecom vendors such as Lucent have a shot at financial recovery. But they'll need to prove themselves to potential customers, Stasney says, since carriers are going to be much more selective in picking their suppliers, judging them not only on the basis of their products and technology but also their long-term prospects and their ability to support their products around the world.