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Lucent Cuts Net Loss; Revenue Down

Telecommunications equipment maker Lucent Technologies Inc. saw its revenues fall and its net loss narrow in its second fiscal quarter, as it reported its eighth straight quarter of red ink while in a 16-month restructuring plan. The company also confirmed reports that it will cut about 6,000 more jobs, and said that its spin-off of its Agere Systems Inc. unit would be completed in June.

Murray Hill, N.J.-based Lucent said it recorded a pro-forma loss of $631 million or $0.20 a share, excluding its Agere fiber-optic business. In the year-ago period. Lucent reported a loss of $1.39 billion or $0.41 a share. A consensus of analysts polled by Thomson Financial/First Call had expected Lucent to report losses of $0.17 a share on a pro forma basis for the latest period.

Lucent also cut its net loss to $535 million or $0.16 per diluted share from a loss of almost $3.69 billion or $1.09 a diluted share in the year-ago period.

The company recorded pro-forma revenues of $3.52 billion for second quarter, a modest increase over the $3.47 billion in revenues reported in this year's first fiscal quarter, but some 34% off of the $5.33 billion in pro-forma revenues Lucent saw in the year-ago quarter.

In a statement issued before this morning's open bell on Wall Street, Lucent Chief Executive Officer Patricia Russo said her company saw "significant progress" in the quarter. "When the market improves, Lucent will be well-positioned to profitably grow the business," she said.

In its quarterly fiscal report, Lucent also confirmed market and press rumors that it expects to cut around 6,000 more workers by the end of this fiscal year. Already Lucent said it has cut around 23,600 employees, which is more than the 15,000 to 20,000 workers the company had expected to cut. Currently, Lucent employs around 56,000.

While the company said it would not provide top-line guidance for the third fiscal quarter because of uncertain market conditions, Lucent Chief Financial Officer Frank D'Amelio said, "with the ongoing impact of our business restructuring program and assuming no significant change in current revenue levels, we expect to see modest sequential improvement, on a pro forma basis, in the bottom line for the third fiscal quarter of 2002.''

The networking giant also said it has met financial conditions under its credit facility to complete the spinoff of Agere Systems, with a stock distribution to happen on June 1. Last March, Lucent said it had to delay the spinoff because it did not meet conditions under the credit facility.

"There's no question that it is in the best interest of the shareowners of Lucent and Agere that Agere be an independent company, free from the conflicts inherent in being owned by a large telecommunications equipment provider," Russo added.

Bob Woods is the managing editor of InstantMessagingPlanet.