Lucent hawks enterprise services

Lucent continued its paring of noncore assets with the announcement that its enterprise professional services business is for sale.

Lucent’s enterprise-services unit, which generated about 5% of Lucent’s services revenues in fiscal 2001, could fetch $150 million to several hundreds of millions of dollars, according to analysts. Likely buyers could be other telecom equipment companies wishing to boost their presence among Fortune 500 customers or large computer outfits moving into the network services space.

Facing a 10% dip in its telecom equipment markets for 2002 and declining gross margins, Lucent is trimming its business lines and also trying to boost its liquidity position. Lucent will burn about $5.6 billion in cash in fiscal 2002 and had a cash balance and available credit facilities amounting to about $5.4 billion at the end of fiscal 2001.

The sale of Lucent’s Optical Fiber Systems unit to Furukawa Electric, which the company says will close by year’s end, is still pending and is expected to bring in $2.75 billion.

Lucent expects to find a buyer or another “strategic alternative” for the enterprise services outfit by the end of this year.

--Vincent Ryan, senior editor