In a rare bit of good news related to Lucent (NYSE: LU), spin-off Avaya (NYSE: AV) met analyst expectations for its first quarter and said it would more than double its earnings in 2001.
Shares of the Avaya, which makes corporate communications networks, closed yesterday's session down $0.01 to $16.99. Avaya was spun off from parent Lucent in September.
Excluding expenses from its spin-off from Lucent, Basking Ridge, N.J.-based Avaya earned $51 million, or 16 cents a share, from continuing operations, matching analysts' estimates from First Call. Profits fell 23 percent compared to the $67 million, or 24 cents a share, reported a year earlier.
Revenues from the company's ongoing operations increased 3.4 percent to $1.78 billion compared with $1.73 billion in the year ago quarter.
Including charges, Avaya reported first-quarter profits of $16 million, or 3 cents a share, down from $69 million, or 25 cents a share, a year ago.
The company also reiterated its target of mid-single digit revenue growth and said it expects to "more than double" its net income in 2001 as it realizes restructuring gains.
First Call estimates for full-year fiscal 2001 earnings are for $1.27 a share in 2001, versus 55 cents a share in 2000.
Gross margin for ongoing operations was $797 million or 44.7 percent of revenues, compared with $845 million or 41.5 percent of revenues in the fourth fiscal quarter of 2000, a decline of $48 million.
The quarter from Avaya is in stark contrast to the recent fortunes of its former parent. The struggling telecommunications equipment provider, which most recently said it was laying off 10,000 of its workers, has been dogged by multiple earnings warnings and disappointing results.