Lehman Brothers lowered its earnings and revenue expectations for Lucent (LU Quote - Cramer on LU - Stock Picks) for the sixth time in 12 months, while Moody's and Standard & Poor's cut their ratings on the communication equipment maker's debt to a notch above junk status.
In recent trading on the
New York Stock Exchange, Lucent lost 29 cents, or 1.9%, to $15.07.
Lehman analyst Steven Levy expects sales to decline 24% for fiscal year 2001, which ends in September, a drop that would translate to a top line of $25.6 billion. Levy projected that Lucent will lose 67 cents a share for the year. For 2002, Lehman forecast that Lucent's sales would grow 20% to $30.7 billion, while the company should turn a profit of 22 cents a share.
"Until we see signs that Lucent has fundamentally bottomed, we continue to recommend that investors, not to be confused with short-term traders, stay on the sidelines and look for other ways to play the telecom equipment market," Levy said in his research note.
Analysts queried by
First Call/Thomson Financial expect Lucent to lose 51 cents a share in 2001, but earn 27 cents a share in 2002. The company earned 93 cents in 2000.
A Lucent representative said the company would continue with the
restructuring plan announced on Jan. 24, which included significant job cuts.
Last week, a published report indicated that the
Securities and Exchange Commission was investigating whether Lucent
improperly booked $679 million in revenue during the fiscal year ended Sept. 30, 2000. The company later said the SEC had made no charges of any kind regarding questionable accounting issues.
Aileen Gallagher
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