Lucent Technologies (NYSE: LU) came in at the low end of its first quarter warning.
After market close Thursday, the maker of communications and networking equipment reported fiscal first quarter earnings of $1.175 billion, or 36 cents per share, excluding non-recurring events. Earlier this month, Lucent warned it would report net income ranging between 36 and 39 cents per share.
Net income remained below consensus expectations. First Call's survey of 29 analysts predicted a profit of 37 cents per share for the quarter ended Dec. 31.
Including a one-time gain of $115 million from a stock sale and charges of $40 million related to several acquisitions, Lucent earned $1.25 billion, or 38 cents per share.
First quarter revenue rose slightly to $9.91 billion from $9.84 billion a year earlier, when Lucent earned $1.523 billion, or 48 cents per share.
Revenue from service provider networks fell 2 percent year-over-year to $6.22 billion. Lucent has said it was caught off guard by strong demand for new optical systems. The company also saw lower switching and wireless revenue largely because customers outside the United States delayed network deployments. And software revenues were below forecasts because customers are starting to spread their software purchases throughout the year, rather than concentrating them in Lucent's first quarter as they had the past, the company said.
Enterprise network revenue rose 4 percent year-over-year to $2 billion. Lucent's Microelectronics & Communications Technologies unit generated sales of $1.51 billion, a 17 percent gain from a year earlier.
Lucent's gross margin fell to 46.9 percent from 53 percent in the first quarter of fiscal 1999. Lower software revenue and and higher costs related to new product introductions helped drive margins down.
"As we've said, we're disappointed with our results for the quarter," said Richard McGinn, chairman and CEO. "However, industry growth is strong, and we are well positioned to take advantage of that growth."
McGinn repeated Lucent's belief that manufacturing problems would be resolved by the end of the fiscal second quarter. Delayed network deployments will happen sometime in the current fiscal year, McGinn said.