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Tech Industry

Lucent back in the black

The network equipment maker ends three years of unprofitability, posting a net profit of $99 million for the fourth quarter.

Lucent Technologies on Wednesday reported a net profit of $99 million for its fourth quarter, ending a string of three year's worth of unprofitable quarters for the maker of equipment for cell phone and other networks.

But Chief Executive Officer Patricia Russo warned investors that the company still has "some work to do and, in the current challenging market environment, it's likely we will still have some ups and downs on the way to sustained profitability."

Russo said Lucent has recently experienced some growing stability within the telecommunications industry, plus "pockets of opportunity" for the equipment needed to create city-size optical networks and high-speed, wireless data networks.

The Murray Hill, N.J.-based company reported fourth-quarter earnings of 2 cents a share for the period that ended Sept. 30, compared with a loss of $254 million, or a loss of 7 cents a share, in the same quarter last year. Its sales of $2.03 billion for the quarter was a slight improvement, about 3 percent, from the $1.96 billion reported in the same quarter last year.

Lucent's earnings beat the loss of 4 cents a share expected by analysts surveyed by First Call.

Lucent's results are adding to the renewed enthusiasm within the telecommunications industry, which has been mired in what some industry observers believe is its worst slump ever. The recent spate of earnings reports in the sector has helped lift spirits, although Lucent, Cisco Systems and other major telephone equipment providers remain cautious about citing any nearing recovery.

Lucent didn't predict its next-quarter performance, but Chief Financial Officer Frank D'Amelio said the company expects to achieve some sustainable profitability next year when it will focus on new-product areas for the company, such as voice over Internet Protocol dialing equipment.

The company last reported a net-quarterly profit in mid-2000. Since then, it and the rest of the telecommunications industry have been roiled by increasing competition, falling equipment prices and global economic dourness.