Miss Musses Lucent's Hair and Shares

Friday the 13th keeps the Lucent (LU) legend rolling along.

The phone equipment giant said sales last quarter plunged 16% below expectations. The shortfall comes after Lucent spent the better part of last year squeezing out costs and clearing a path to wider margins.

But a steep drop in demand for gear in China and at home nonetheless blindsided the big gearmaker. And adding to the usual Lucent blunders, a stock sale by CEO Pat Russo couldn't have come at a more unfortunate time.

On Tuesday, three days before Lucent warned and 10 days after the company's first quarter closed, Russo sold 200,012 shares for $553,000. Bad timing? Yes. Clueless? Pretty much. But scandalous? Apparently not.

A Lucent representative says the shares were sold to cover taxes on a block of Russo's shares that vested. The rep called the sale automatic, and added that though Russo may have been aware of the sale, she had no say in it, nor did she receive any gains.

The rep said Russo's shares are on a vesting schedule that comes around every January, and has so for the past three years.

Still, say observers, it doesn't take a public relations genius to figure out that it looks bad for the top executive to be selling, for whatever reason, right before you tell investors about a massive shortfall.

Investors and analysts say they see Russo's sale less as alarming than as the sign that Lucent has returned to its blundering ways. "This stuff happens all the time," says one hedge fund manager.

Lucent Chief Russo

Lucent watchers say they were more apt to chalk up the week's events as more of the old hex that always seems to accompany Lucent as it stumbles from one mishap to another.