Citing lower sales in the U.S. and China, Lucent Technologies lowered its guidance for the year, anticipating annual revenues will be either flat or will rise in the low single digits.

The Murray Hill, N.J.-based networking gear vendor said it expects revenues for the first quarter of fiscal 2006 to be about $2.05 billion, significantly lower than the $2.44 billion average estimate of analysts polled by Thomson First Call.

It's also less than the $2.43 billion in sales Lucent reported for the previous quarter.

"While we are clearly disappointed, we consider this to be a temporary setback to the progress we have made, and we are confident that our performance will be much stronger for the remainder of the year," said Lucent Technologies Chairman and CEO Patricia Russo in a statement.

Lucent also said it expects revenues in the second half of the fiscal year to be significantly higher than the first half of the year, thanks in part to its evolving multimedia subsystem, which supports the delivery of voice over IP (VoIP) (define).

The company is also banking on new converged "lifestyle" services for mobile phones, PDAs and PCs.

Separately, Russo announced that Lucent CFO Frank D'Amelio, 48, has been named the company's new chief operating officer (COO). As COO, D'Amelio will oversee Lucent's sales, product groups, services business, supply chain, IT operations and labor relations.

D'Amelio will continue as CFO until a successor is named. He will be the first COO for the company since 2003, when Russo held that role.

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Lucent has other issues.

Last month, a U.S. Bankruptcy Court ruled against the networking giant in a breach-of-contract and bankruptcy suit originally brought by the trustees for Winstar Communications.

Lucent expects the verdict to result in a charge of about $300 million in its first quarter. The vendor will provide more details on its financials when it announces its quarterly results on Jan. 24.