Lucent says sales for the just-ended quarter are 20% to 25% lower than its third-quarter revenue of $2.95 billion. That would put sales at $2.36 billion to $2.21 billion. The company also will take $4 billion in charges for severance payments and a decline in its pension assets. Lucent plans to release its earnings report Oct. 23.
"It feels like we're trying to fly a 747 through a storm and change the engines at the same time," president and CEO Patricia Russo said during a conference call Friday afternoon.
And next year isn't shaping up any better. The company said it expects business in 2003 to continue to decline, with revenue expected to be down 20% from this year.
Lucent execs said the job cuts and other restructuring efforts are needed to lower its break-even point so that it can meet its target of returning to profitability at the end of fiscal 2003. A month ago, the company said it could break even with quarterly revenue of $2.5 billion to $3 billion; now, according to company officials, the company needs to cut expenses to $2.5 billion or less.
"Based on conversations with our customers, we are tightly focusing our investments on the nearest and clearest market opportunities that will help them expand their existing networks and offer next-generation services," Russo said.
Lucent's stock, which traded as high as $83 in December 1999, ended the week at 58 cents a share.