Lucent hurdles estimates in 4Q

Lucent Technologies (NYSE: LU) cruised past Wall Street estimates Tuesday with fiscal fourth quarter operating earnings of $972 million, or 31 cents a share, as sales jumped 23 percent to $10.57 billion.

First Call consensus was expecting earnings of 29 cents a share.

In the same quarter a year ago, Lucent reported operating earnings of $647 million, or 21 cents a share, on sales of $8.57 billion.

Including one-time events, Lucent reported fourth quarter earnings of $948 million, or 30 cents a share. The one-time items included a $274 million pre-tax ($167 million, after-tax) gain from its investment in Juniper Networks (Nasdaq: JNPR) and $258 million in pre-tax ($191 million, after-tax) costs associated with Ascend, Livingston and Nexabit.

One-time charges are standard for Lucent, which has a big acquisition appetite. Lucent closed its Nexabit and Ascend acquisitions in the quarter. Lucent also announced the acquisition of INS.

Lucent chief Richard McGinn said in a statement that the fourth quarter was the strongest in the company's history. Lucent announced $2 billion in contract wins for September. For fiscal 1999, Lucent had $11 billion in contract wins.

Lucent, which is in a networking battle with Cisco Systems (Nasdaq: CSCO) and Nortel Networks (NYSE: NT) also had success abroad. The company's international revenue jumped 38 percent for the quarter and 47 percent for the year.

By business unit, Lucent reported fourth quarter revenue for network operator systems jumped 32 percent to $6.9 billion, revenue for business communications systems were flat at $2.47 billion, and revenue for microelectronic products gained 22 percent to $991 million.

Gross margins, excluding one-time items, were 46 percent for the fourth quarter, down from 48.2 percent a year ago. Lucent said the dip reflected a change in product mix.

For its fiscal year, Lucent reported operating earnings of $3.8 billion, or $1.22 a share, on sales of 38.3 billion. Sales were up 20 percent from 1998.

In a separate announcement, Lucent said it was reorganizing into four units focused on service provider networks, enterprise networks, NetCare professional services and microelectronics and communications technologies.

The service provider unit will include Lucent's optical networking, switching and access systems, wireless networks, and communication software businesses. Enterprise networks will consist of Lucent's current business communications systems and government divisions. NetCare will consist of Lucent's current services business, which recently merged with newly acquired INS.

The microelectronics and communications technologies unit includes Lucent's current chip business, network products group, and intellectual property division.