Updated from 8:09 a.m. EDT
uncorked a triple-shot of bad news Friday, saying its fourth-quarter is going worse than expected, that it will cut 10,000 more jobs and must take a $3 billion charge to cover a pension shortfall.
Lucent was also forced to cancel $2 billion in untapped credit and securitization agreements because the disclosures would've caused a default. The news sent the shares down 7% to 65 cents in Instinet premarket trading Friday.
The telecommunications gear maker now expects to lose 65 cents a share in the quarter, up from previous loss guidance of 45 cents. The 10,000 job cuts will be carried out before the end of next year, leaving the firm with 35,000 employees.
reported in August that the company was expected to make further cutbacks.
In the year ago fourth quarter, the company lost $7.3 billion, or $2.16 a share, from continuing operations, including an $8 billion charge, on revenue of $5.2 billion.
The job cuts are part of a restructuring plan that the Murray Hill, N.J., company hopes will lower the amount of quarterly revenue it needs to break even to $2.5 billion. The company expects fourth-quarter revenue to decline 20%-25% from the $2.9 billion it posted in the prior period.
Analysts polled by First Call had been expecting the company to post revenue of $2.26 billion in the fourth quarter.
The latest quarter's loss estimate includes a larger-than-expected inventory writedown. The company will also post a $1 billion restructuring charge in the period.
In addition, Lucent must take a charge of about $3 billion due to a decline in pension assets in its management pension plan, primarily as a result of the falling stock market.
The company was forced to cancel a $1.5 billion credit facility and its $500 million accounts receivable securitization vehicle to avoid defaulting on them. It didn't have an outstanding balance on either vehicle and said its in talks with lenders on a new and smaller credit facilit
Despite the charges Lucent said it continues to have enough money to fund its operations and business plan and expects to have more than $2 billion in cash at the end of fiscal 2003 without using any new credit facility.
The company had cash and marketable securities of about $4.4 billion as of Sept. 30, down $1 billion from the prior period because of $200 million in expenses under an old restructuring and about $200 million associated with a previously announced lawsuit settlement.