Lucent Technologies Inc. said a North American slowdown in wireless equipment sales caused its year-over-year revenue to sink 12 percent and income to plummet 79 percent.
The company reported third-quarter net income of $79 million from revenues of $2.05 billion, compared with year-ago results of $372 million in net income based on revenues of $2.34 billion. The results were in line with Lucent’s lowered forecasts.
Lucent’s stock remained relatively unchanged after the news at around $2 per share.
“While these results were clearly disappointing, we do not believe these results are indicative of the longer-term opportunities we see in the global mobility market,” stated Patricia Russo, Lucent’s chairman and chief executive officer.
Russo added that the fiscal third-quarter results reflect a shift in spending as the company’s North American customers begin upgrading to next-generation networks. However, Russo pointed out that European revenues grew both quarter-over-quarter and year-over-year.
The company’s chief financial officer, John Kritzmacher, said Lucent achieved a gross margin of 41 percent “despite decreasing revenues and a less favorable product and geographic mix.”
Looking forward, Kritzmacher said that if CDMA2000 1x EV-DO Revision A and HSDPA rollouts remain on track, Lucent expects that North American deployments will “enable us to make the fourth quarter our highest quarterly revenue period for fiscal year 2006 by a significant margin.”
As for Lucent’s pending acquisition by Alcatel Inc., the companies now expect the deal to close by the end of this year since both European and U.S. regulatory agencies have given their approval.
Lucent and Alcatel also announced further post-merger appointments to top management positions, naming Oliver Baujard chief technology officer and Helle Kristoffersen vice president of corporate strategy. Both Baujard and Kristoffersen currently hold the same titles at Alcatel.
Furthermore, Lucent’s Jeong Kim will keep his position as president of Bell Labs, and John Giere, Lucent’s chief marketing officer, will hold the same position in the combined company. Lucent’s chief information officer, Elizabeth Hackenson, has been named to head the post-merger Information Systems and Information Technology groups.
