Lucent Hits Targets

Third-quarter numbers match Wall Street estimates and the company reaffirms guidance.
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Lucent Technologies

(LU)

posted a fiscal third-quarter profit Tuesday and reaffirmed full-year guidance.

For the quarter ended June 30, the Murray Hill, N.J., telecom gearmaker earned $372 million, or 7 cents a share, down from the year-ago $387 million, or 8 cents a share. Tax gains and bad debt recoveries boosted earnings by 2 cents a share in the latest quarter and by 4 cents a year earlier, Lucent said.

Revenue was flat sequentially and rose 7% from a year ago to $2.34 billion. The figures were in line with the Thomson First Call analyst consensus estimate, which had called for a 4-cent-a-share profit on sales of $2.34 billion.

"This quarter, we continued to deliver steady, profitable results driven primarily by our strength in 3G mobile networks and growth in our Services business," said CEO Patricia Russo. "We believe our wireline business is stabilizing, and we continue to strengthen our position in the next-generation of IMS-based networks with more customer trials and developments."

The company said third-quarter gross margin rose to 45% from 43% a year earlier. Lucent used $318 million during the period to retire debt, leaving its cash on hand at $4.1 billion.

Wireless revenue fell 2% sequentially to $1.17 billion, while networking revenue was flat at $592 million and worldwide services revenue rose 8% to $538 million.

"We continue to expect Lucent's annual revenues for fiscal 2005 to increase on a percentage basis in the mid-single digits, which we believe will be at about the market growth rate," finance chief Frank D'Amelio said. "We continue to focus on improving our productivity and managing our cost and expenses, while we build on new revenue and market opportunities for the business."

Early Tuesday, Lucent was flat at $3.13.