Updated from July 15Lucent (LU) says a wilting wireless business will penalize sales, ensuring its 13th straight quarterly loss and again delaying its long-awaited return to profits.
The hexed telecommunications equipment maker had promised to deliver profits by the end of this fiscal year, which ends Sept. 30. But the latest in a seemingly endless string of earnings warnings came Tuesday evening, when Lucent said spending cuts and sales delayed by a major customer will shove those plans aside.
The New Jersey telecom gear giant projected it will lose 7 cents a share on $1.97 billion in sales -- an 18% drop from second-quarter levels -- when it reports third-quarter earnings next week.
In the second quarter, Lucent posted a net loss of 8 cents on $2.4 billion in sales. The company has previously said it would cut costs to the point where it can break even on $2.4 billion in quarterly revenue.
The setback shows that as much progress as Lucent has made with investors, it continues to find it difficult to overcome the weakness of its core business. In recent months Lucent had cleared many of its major hurdles, settling a
Securities and Exchange Commission
investigation, a shareholder lawsuit and a whistleblower case with a former sales executive. Its shares have risen near the $2 level, though they sold off on Tuesday's news. At midday Wednesday, the shares were down 23 cents, or 12%, to $1.69.
The New Jersey networking giant has cut its staff by two-thirds from peak levels in an attempt to adjust costs to a shrinking telecom market. Recent contract wins to supply wireless infrastructure gear had been among the rare bright spots at the sputtering company.
Now investors will likely be approaching Lucent's gearmaking peers with some caution.
, which reports earnings next week, counts on wireless sales for nearly half of its revenue. The Lucent shortfall will also be seen as a bad omen for the top wireless networking company,
, which reports Friday.