Lucent warns, pushes back profitability

Lucent Technologies today revamped its financial guidance for its second fiscal quarter of 2002 and said it will not return to profitability and positive cash flow until 2003.

The equipment vendor said it continues to expect sequential improvement in the bottom line for Q2, excluding a 6 cent per share charge related to the new tax law. Additionally, Lucent expects revenues to show a modest-to-10-percent improvement on a sequential basis. In guidance given during its first quarter conference call, the company said it anticipated a 10% to 15% improvement.

“This is really sort of a systematic tightening we’re seeing across the industry,” Patricia Russo, Lucent president and CEO told analysts this morning. “It’s only been in the last couple of weeks that we’ve seen the effect of a general tightening and restraint of spending that is greater than we expected.”

As a result of the continued softness, Lucent also pushed back the completion of its Agere spin-off to the third fiscal quarter. Spinning off sooner could have put Lucent in violation of the covenants of it bank facility. The company doesn’t expect its cash position to be impacted, but it is considering selling convertible securities if needed.