Lucent Replaces Skipper McGinn with Schacht
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Acting swiftly after assessing its recent execution and focus as unsatisfactory this past weekend, Lucent Technologies Inc. Monday ousted Chairman and Chief Executive Officer Richard McGinn and put Henry Schacht temporarily in his place.
The move comes at a critical time for Lucent, which many analysts have said needed a management shakeup to proceed successfully.
Schacht is no stranger to the part -- he had held the role at the company from 1995 to 1997. He will work with Lucent's senior executives to manage the firm and is initiating a search for his successor. Lucent has also suspended its search for a chief operating officer in light of this development.
Lucent's board of directors reviewed the firm's recent performance and outlook for the current quarter and realized that a change was necessary. The company said that it expects pro forma revenue from continuing operations for the current quarter to decline about 7 percent and pro forma earnings per share from continuing operations to break even.
Furthermore, when Lucent did try to launch its own optical product line, it was unable to manufacture the products fast enough to keep up with customer demand. Consequently, the firm lost orders to its rivals.
Lucent will also be moving up the release of its fourth fiscal quarter 2000 results, previously scheduled for tomorrow morning, to after the market closes Monday.
Franklin Thomas, Lucent's senior director, said the decision was a difficult one because McGinn had made significant contributions to the growth in the company. However, he said, McGinn's skill set would not suffice for taking Lucent into the future.
The company confirmed that it would move ahead with plans to spin off the microelectronics business and sell its power systems business.
After the market closed Monday, Lucent said pro forma earnings per share from continuing operations for the quarter were 18 cents a share, or $600 million, down from 24 cents a share, or $768 million, a year ago.
Deborah Hopkins, Lucent's chief financial officer, said her firm plans to exact a number of changes in the next year. These initiatives include an intense review of Lucent's product portfolio to align resources against the highest value opportunities.
Additionally, the Lucent want to consolidate its corporate infrastructure, re-deploy the company's marketing and sales resources to align them with the highest growth opportunities, improve supply chain management and implement a new customer ordering system.
stock closed down 2.59 percent to $22.06. For the year, the stock is down more than 75 percent from its high