Telecom equipment giant
dropped 26.1% in preopen
trading following its warning after the close Tuesday that fourth-quarter earnings would be just 17 to 18 cents per share, well short of the Street estimate of 27 cents, and below the year-ago 24 cents.
The company blamed weakening optical equipment margins, slowing circuit-switching sales and a rising bad debt reserve.
Credit Suisse First Boston
downgraded the stock and
cut earnings estimates, but
said Lucent's valuation is low and advised its clients not to sell.