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Lucent Narrows 1Q Loss


Telecom equipment maker cuts operating expenses, offsetting a continued drop in revenue.

By The Associated Press
InformationWeek
January 22, 2003 12:00 AM

MURRAY HILL, N.J. (AP) -- Lucent Technologies Inc. narrowed its first-quarter loss to $389 million as major cuts in operating expenses helped offset a continuing decline in revenue.

The maker of telecommunications equipment on Wednesday reported that the net loss amounted to 11 cents per share. That's down from a net loss of $465 million, or 14 cents per share, in the year-ago quarter. It also was a sharp improvement from its fiscal fourth quarter, when whopping restructuring and other charges contributed to a net loss of $2.9 billion, or 84 cents per share.

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Lucent said the loss per share would have been 15 cents, excluding the favorable impact of 5 cents from the repayment of some old customer debt and its reduction of reserves to cover a recent legal settlement. One cent of that gain was offset by the cost of repurchasing some of its convertible securities.

That 15-cent loss beat by 6 cents the 21-cent loss-consensus forecast of analysts surveyed by Thomson First Call.

The company posted total revenue of $2.07 billion in the quarter, down 42% from $3.58 billion a year ago, but only down by 9% from $2.28 billion in the quarter ended Sept. 30.

"We made good progress on our path to profitability with an improvement in gross margins and continued reductions in expenses, despite a decline in revenue that was in line with the low end of our guidance," said Lucent's chief executive officer, Patricia Russo.

The company also said that it's still aiming to return to profitability by September. Over the last quarter, Lucent announced 20 new contracts worth nearly $1.5 billion and repurchased about $610 million of convertible preferred stock, the company said.



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