Lucent Lowers Sales Expectations

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) .

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.

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.