MURRAY HILL, N.J. – Battered telecommunications equipment maker Lucent Technologies Inc. (LU) on Tuesday cut quarterly revenue expectations and delayed its return to profitability, as phone companies scale back spending.
Lucent, which has cut tens of thousands of jobs, closed facilities and shed units in a bid to restore profitability through the harsh telecommunications downturn, also said its results will not meet the minimum thresholds to allow a long-planned spin-off of its stake in telecom chip maker Agere Systems Inc. this quarter.
It hopes to be able to execute the transaction in the third quarter, Lucent said in a statement.
Lucent said it will record a unanticipated tax charge of about 6 cents per share in the fiscal second quarter ending this month,.
Just three weeks ago, Lucent said sales would grow 10 percent to 15 percent in the second quarter from the first quarter. Now, however, it sees just a "modest to 10 percent" rise.
"Large service providers continue to reduce or defer their spending as they rethink their business plans and conserve cash, which is having an impact on our top line," Lucent Chief Financial Officer Frank D'Amelio said.
The company said its loss from continuing operations, excluding a range of items, should improve in the second quarter from the first quarter, when it posted a loss of 23 cents per share.
Wall Street analysts had been looking for a loss of between 6 and 24 cents per share, with a mean estimate of a loss of 14 cents, according to research firm Thomson Financial/First Call. Revenue had been seen climbing to about $3.8 billion from less than $3.5 billion in the first quarter.
Ongoing uncertainty in the service provider market will most likely cause Lucent's return to profitability and positive cash flow to slip into fiscal year 2003, it said.
The company had hoped to return to the black on an operating basis some time this year. Lucent has posted five consecutive quarters of operating losses.