Updated from 9:25 a.m. EST

In a move to boost its sagging stock price and focus its business,

Lucent Technologies

(LU)

announced Wednesday a plan to spin off two businesses into a company that will focus on the enterprise networking market.

Shares of Lucent, based in Murray Hill, N.J., are down 23% over the last three months but closed at 68 1/8, up 8 5/8 or 14.5% in Wednesday trading.

Lucent's private branch exchange and

Systimax

structured-cabling and LAN-based data businesses will form the basis of an $8 billion company to be named at a later date. The spinoff is expected to be completed by the end of the telecommunications-equipment maker's fiscal fourth quarter on Sept. 30.

"The PBX and enterprise business has been growing a little, but not as much as the wireless communications and optical networking businesses," said analyst George Hunt of

Wachovia Securities

. He just upgraded Lucent to a strong buy last Friday and his firm has done no underwriting for the company.

Lucent is the major manufacturer -- along with

Nortel Networks

(NT)

, Germany's

Siemens

(SMAWY)

TheStreet Recommends

and Sweden's

Ericsson

(ERICY)

-- of the main central office switch and is also a mainstay in the enterprise PBX solutions market. "However, the new wave is IP

Internet protocol telephony, of which

Cisco

(CSCO) - Get Report

is the champ," Hunt said. "What people have beat Lucent up about is how they can continue to grow PBX sales year on year when that type of traffic is slowing down."

Now that shouldn't happen anymore. "Lucent will concentrate greater resources on fast-growing areas like optical networking, Internet infrastructure, wireless, semiconductors, optoelectronics, Web-based enterprise solutions linking private to public networks, and professional design and consulting services for service providers and enterprises," Richard McGinn, Lucent's chairman and chief executive, said in a statement.

The new company will have its own brand, board of directors and research and development operation. It will include Lucent's core switching business for enterprises, including

Definity IP Solutions

, the

IP Exchange System

for IP networks, call center solutions,

Octel

enterprise voice messaging platforms, conferencing and collaboration systems, Systimax structured cabling systems and installation, maintenance and remote management services.

Lucent already announced last October that it would split the company up into four core businesses: enterprise networks, service provider networks, netcare professional services and microelectronics and communication technologies.

Donald Peterson, currently a Lucent executive vice president and its chief financial officer, will head up the new company as president and chief executive. Henry Schacht, a former Lucent chairman and a current board member, will serve as chairman.

Peterson joined Lucent in 1996 after 19 years at Nortel, where he had been chief financial officer and president of Nortel's communications systems business. Schacht was the chairman of Lucent from 1995 to 1997.