MURRAY HILL, N.J.—For the second time this year, Lucent warned of lower sales prior to releasing quarterly results. The company said it expects to post third-quarter earnings of $2.04 billion, compared with $2.04 billion last quarter and $2.34 billion in the year-ago quarter.
Pat Russo, chairman and chief executive officer of Lucent, blamed the company’s year-over-year earnings decline primarily on delays in spending on wireless network gear in North America due to consolidations among operators. Decreased revenues in China were also cited as part of Lucent’s revenue shortfall.
However, Russo added that the consolidations of North American service providers “will lead to opportunities as service providers look to us to help them integrate their large, complex networks” and said that Lucent’s customers are beginning to move toward the next phase of mobile high-speed data, pointing to Lucent’s CDMA2000 1x EV-DO Revision A contracts with Verizon Wireless and Telecom New Zealand.
Frank D’Amelio, Lucent’s chief operating officer, predicted that the company’s fourth-quarter results would be significantly better based on increased EV-DO Rev. A and HSDPA sales. He went as far as saying, “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.”
Lucent also said its merger plans with Alcatel are on track to close by the end of the year.
