NEW YORK and HANOVER, Germany—Lucent Technologies and Nokia cut their estimates, owing to what the network equipment makers described as weak demand for telecom equipment.
Nokia cut its estimates just as it rolled out a suite of cell phones at the CeBIT technology fair in Hanover, Germany.
“Net sales for the first quarter are expected to be slightly lower than anticipated, but higher than expected profitability driven by Nokia’s core strengths of brand, excellence in execution and winning portfolio,” said the company in a statement.”
The company said network equipment sales may decrease by about 25 percent, compared with the guidance of 16 percent to 20 percent.
Lucent said it would take longer for demand for network equipment to rise to its estimates, causing the company’s fragile stock to suffer additional injury with a more than 12-percent recent tumble. It said it now anticipates about a 10-percent rise in sales in the second quarter from the first quarter as against about 15 percent.
Ratings firm Standard & Poor’s lowered the company’s rating to single B-plus from B-minus. The company has about US$3.3 billion in debt.
“Lucent’s financial flexibility is expected to remain adequate for its operational needs as it continues to adapt to challenging market conditions,” said the ratings firm.
The company has said it may not be profitable until 2003.
