Lucent ( LU) matched its reduced fiscal third-quarter earnings target and filled out the management team for its planned merger with Alcatel ( ALA). For the quarter ended June 30, the Murray Hill, N.J., telecom equipment maker made $79 million, or 2 cents a share, down from the year-ago $372 million, or 7 cents a share. Revenue fell 4% sequentially and 12% from a year ago to $2.05 billion. The figures matched the estimates Lucent issued two weeks ago, when it
warned that slowing U.S. wireless sales would keep it from hitting Wall Street estimates. "While these results were clearly disappointing, we do not believe these results are indicative of the longer-term opportunities we see in the global mobility market," said CEO Pat Russo. "In certain other regions, particularly in Europe, our revenues grew sequentially this quarter. In addition, revenues increased sequentially and year over year for our Multimedia Network Solutions and Services segments, which both posted their highest quarterly revenue for this fiscal year." The company said its latest-quarter gross margin was 41%, despite a less favorable product and geographic mix. "Looking ahead and assuming that our EV-DO Rev. A and HSDPA rollouts remain on track, we expect that mobility deployments in North America will enable us to make the fourth quarter our highest quarterly revenue period for fiscal year 2006 by a significant margin," said finance chief John Kritzmacher. Given the company's pending merger transaction with Alcatel, Lucent said it is continuing its practice of not providing specific annual guidance. Lucent and France's Alcatel also named execs to serve along with Russo and Alcatel CEO Serge Tchuruk when the companies complete their merger later this year. Alcatel's Olivier Baujard will serve as chief technology officer and Alcatel's Helle Kristoffersen will become the vice president of corporate strategy. Jeong Kim will remain president of Bell Labs. Lucent's John Giere, currently chief marketing officer for Lucent, will assume that post for the combined company. Lucent Chief Information Officer Elizabeth Hackenson has been named to lead the combined company's Information Systems/Information Technology organization. "Alcatel and Lucent are fortunate in the depth and breadth of the talent each company is bringing to our proposed merger," said Russo, who will become CEO of the combined company. "Our experienced international management team will give our combined company an enormous advantage as we face the dynamic market in which we will compete."