Lucent logs 10th consecutive losing quarter, cuts some products

Lucent Technologies’ fourth quarter looked like more of the same as the company struggles to regain its footing. The company recorded a net loss of $2.81 billion for the quarter, or $0.84 per share. Lucent’s revenue also declined 56% to $2.28 billion, which contrasts to the $5.16 billion in revenue for the year ago quarter.

In addition to the reporting of its financial results, Lucent outlined its coming changes in product strategy. Those changes include the delaying of development for Lucent’s softswitch products targeted at wireline networks and a reduction in the R&D investment for its access business. But Lucent will continue to support its access customers and support new development on a case by case basis. The company intends to focus more of its efforts on services and wireless businesses.

“It is clear to us our that our customers are not going to undertake a massive replacement of Class 4 and Class 5 [switches] in the near term, and as a result [we are] deferring development of Class 5 replacement applications,” said Patricia Russo, Lucent’s chairman and CEO.

Instead, the company will focus on softswitches for wireless operators, which coincides with Lucent’s plan to place more focus on wireless revenue opportunities. According to Russo, the company will also maintain its circuit switches, core ATM and MPLS migration platforms, metro and edge optical networking equipment, network management, mobility equipment and services equipment.

The services and wireless businesses both represent strong growth potential for the company, Russo said. And while many vendors are pulling away from strengthening their service offerings, according to Russo, Lucent is beefing theirs up.

“There’s no question [our] reshaping strategy in services will take some time,” Russo said, adding that it represents a $44 billion market opportunity. “It’s opportunity in near and long term,” she said.

The company expects revenue to be flat to down 10% in the first quarter of fiscal 2003. Just recently the company revealed that it will be cutting another 10,000 employees to bring its headcount down to 35,000 by the end of fiscal 2003. Most of those cuts are expected to take place by March of 2003.