With Monday's second-quarter earnings announcement, Lucent Technologies Inc. has posted losses for eight straight quarters. And even after slashing its employment roster in half to cut costs, further reductions will be necessary, the company said.
The Murray Hill, New Jersey, network equipment maker announced pro forma net losses of US$0.20 a share in its second fiscal quarter of 2002, ended March 31, 2002, compared with a $0.41 a share pro forma net loss in the same quarter a year ago. Analysts polled by Thomson Financial/FirstCall had predicted for a loss on an ongoing, pro forma basis of $0.17 per share, on revenue from ongoing operations of $3.57 billion. Lucent announced pro forma revenue of $3.52 billion.
Pro forma results discount business restructuring and one-time charges, amortization of goodwill and other acquired intangibles, and also exclude a profit the company made from the sale of its optical fiber business.
Lucent's net loss for the second quarter of 2002 was $495 million, or $0.16 per basic and diluted share. Lucent reported a $3.7 billion net loss in the year-ago quarter, or $1.09 per share. Revenue declined 40 percent compared with $5.91 billion in the second quarter of 2001. The net loss in the current quarter includes income of $100 million, or $0.03 per basic and diluted share, related to discontinued operations.
The minimum quarterly revenue Lucent must generate in order to post a profit will be lower now, Lucent said. The previous revenue target of $4.25 billion to be profitable will now be "somewhat below" $4 billion, said Patricia Russo, Lucent's chief executive officer, in a press release. The company must identify areas for further reductions and productivity improvements to get to profit at that revenue level, but Lucent reaffirmed its intention to be profitable in 2003. The company had said earlier this year that it would reach profitability by the end of 2002.
Lucent said it will reduce its current headcount of 56,000 to 50,000 by the end of the fiscal year, but noted that further reductions may be necessary.
Lucent met bankers' marginal profit and cost reduction requirements to permit the company to spin off its Agere Systems Inc. semiconductor and optical components subsidiary, Lucent said. Shares of Agere will be distributed to Lucent stockholders June 1. Lucent's share price is down about 68 percent since the start of the year, closing Friday at $4.29.