Lucent Technologies Inc. stopped its three-year trend of quarterly losses by turning a profit and bringing cheer to its shareholders as the company’s shares rose on the news.
“It feels great to post a profitable quarter with positive operating cash flow,” said Lucent Chief Executive Officer Patricia Russo, noting that some challenges lie ahead. “As we exit 2003 and begin a new year, we still have some work to do, and in the current challenging market environment it’s likely we still have some ups and downs on the way to sustained profitability.”
The company posted a fourth-quarter net income of $99 million, or 2 cents per share, compared with a net loss of $254 million, or 7 cents per share, in the previous quarter. In the same period last year, the company bore a loss of $2.81 billion, or 84 cents per share.
The company’s revenues fell to $2.03 billion in the quarter compared with $2.28 billion in the year-ago quarter. But revenues increased from Lucent’s third-quarter revenues of $1.96 billion.
“We are seeing signs of stability in the overall telecom market, with pockets of opportunity in areas like services, metro optical, voice over IP (Internet Protocol), broadband access and high-speed wireless data,” said Russo, who noted that its restructuring initiatives have been completed “at this point” and reduced expenses by $5.6 billion year over year.
The company credited some of its wireless contracts around the world, especially those with China Unicom, Verizon Wireless and Sprint PCS for CDMA2000 and with AT&T Wireless Services Inc. for UMTS, as buoying its financial profile.
The company has embarked on cost-cutting measures during the past few years, slashing its workforce in half, outsourcing some of its services and spinning off some of its parts.
Lucent also has dealt with accounting challenges that led to Security and Exchange Commission investigations, all of which not only affected its earnings but also created an image problem that nearly led to a merger with French telecom supplier Alcatel Corp.
