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Lucent earnings surprise Street

The company's profits for the first quarter exceed projections by Wall Street analysts.

Lucent Technologies (LU) surprised Wall Street today by posting better-than-expected net profits of $66 million, or 10 cents a share, for the quarter that ended March 31.

Financial analysts had expected the company to post 8 cents a share in profits for its fiscal second quarter, according to a First Call consensus estimate.

Strong growth in international operations and in software, wireless, and switching communications systems contributed to growth in profits and revenues. One year ago, the company posted a loss of $103 million on revenues of $4.6 billion.

Revenues for the most recent quarter rose by 12.5 percent from last year to reach $5.15 billion, the company said.

However, Lucent's consumer product revenues fell by a whopping 41 percent due to changes the company is making in its product lineup and distribution strategy. The company said its recent move to close its phone center stores contributed to falling revenues.

But Lucent, the former development unit of AT&T, is preparing a major overhaul of its consumer products and will launch 40 new products into the consumer marketplace this year. It will distribute them through 17,000 retailers such as Walmart, Sears, and Best Buy, the company said.

Of all the company's operations, Lucent's systems business posted the fastest quarterly growth in revenues--23 percent--riding a wave of demand for telephone lines that the company attributed, in part, to the rise in popularity of the Internet. Its microelectronics unit, which makes custom chips used in wireless telephones, computer networks, and workstations, rose by 18.3 percent. Revenue from corporate telephone networks grew by 14.1 percent, the company said.