Lucent earnings trump Street forecasts
The telephone and networking equipment giant reports earnings that exceed Wall Street expectations and are driven by surging sales of switching systems and data networking systems.
The company also said it is expecting strong earnings in the next quarter.
Still, shares of Lucent dropped 5.14 percent to 109.56 in morning trading because investors were looking for even stronger revenues. The stock has traded as high as 120 and as low as 38.97 during the past 52 weeks.
Excluding charges, Lucent's net income rose a whopping 26 percent to a record $1.4 billion, or $1.05 a share for the first fiscal quarter ended December 31. A consensus of a analysts had expected the company to earn $1.01 a share, according to First Call. Revenues increased 6 percent to $9.2 billion. Lucent posted net income of $1.12 billion, or 86 cents a share, for the year-ago quarter.
Lucent's strong earnings were also driven by a continued demand for data services and Internet access in businesses and residences.
"As our customers continue to evolve and transform their networks for next-generation broadband communications and we add new customers around the world, Lucent's momentum has never been stronger," Lucent CEO Richard McGinn said.
The company said it has already booked more than $1 billion in revenues so far in January for the fiscal second quarter.
"Based on our current planning assumptions, we expect Lucent's earnings per share to double from the 14 cents we reported a year ago," McGinn said.
Lucent's recent $21.7 billion merger agreement with data networking provider Ascend Communications, and the $1.48 billion acquisition of billing software company Kenan Systems is likely to help fuel additional momentum in 1999.
These acquistions are likely to "further establish Lucent as the clear leader in end-to-end communications networking," said McGinn.