Lucent slides on revenue recognition woes

Lucent Technologies (NYSE: LU) said Tuesday that it might have to cut $125 million from its reported fourth quarter sales on account of a revenue recognition problem.

Shares of the telecommunications equipment maker dropped almost 10 percent, off 2 to 18.94.

According to a release, Lucent had "identified a revenue recognition issue" that could trim about $125 million off its fourth quarter revenues, reported Oct. 23. At the time, the company reported $9.4 billion in revenues and posted a profit of 18 cents a share on continuing operations. The company had previously lowered its estimates for the quarter.

The company said the reduction could chop 2 cents off its profit per share for both the quarter and for the year. As well, Lucent said it could not confirm its guidance for the first quarter of 2001.

This latest setback for Lucent compounds a number of recent problems. Lucent fired CEO Richard McGinn in October and has already cut its outlooks for growth four times this year.

Reuters contributed to this story.