Telecommunications equipment maker Lucent Technologies today reported that net income for its fourth quarter rose 49 percent because of strong demand for its products both domestically and globally, and easily exceeded Wall Street expectations.
Lucent said it posted revenues of $8.038 billion for the fourth fiscal quarter ended September 30, 1998, an increase of 23 percent. Revenues for the year-ago quarter were $6.933 billion on a reported basis.
The company's net income for the quarter increased 49 percent to $548 million, or 41 cents a share, excluding one-time charges related to acquisitions. A consensus of analysts expected the company to earn 39 cents per share, according to First Call. Net income for the year-ago quarter, excluding one-time Octel Communications acquisition charges was $369 million, or 28 cents a share.
"Lucent had a very solid quarter, and we are continuing to see strong demand across all of our businesses from both traditional and new customers," Lucent chairman and CEO Richard McGinn said in a statement.
McGinn pointed out that Lucent had a 41 percent increase in revenue from its business outside the United States in this quarter.
"[We] believe bodes well for our international growth strategy," McGinn said. "It is clear Lucent is gaining market share."
McGinn also noted that despite declines in the world semiconductor market, Lucent's microelectronics business posted revenue growth of 10 percent for the year, due to the company's strong position in semiconductors for communications applications.
Shares of Lucent closed higher yesterday, rising 5.6 percent or 4.19 points, to 79. The stock has traded as high as 108.5 and as low as 36.19 during the past 52 weeks.
Lucent Technologies, headquartered in Murray Hill, New Jersey, designs, builds, and delivers a wide range of public and private networks, communications systems and software, data networking systems, business telephone systems and microelectronic components.
Separately, the company announced today that it intends to end its joint venture with Royal Philips Electronics, Philips Consumer Communications, of which Lucent is a 40 percent minority interest holder. It is expected that Lucent and Philips will each regain control of the original businesses that were contributed to the venture by November 30, 1998.
Lucent said it plans to sell its portion of the venture that includes the leading corded and cordless phones and answering machines in the U.S. market, as well as a telephone leasing business.
Lucent is among a select few networking companies that have not seen downturn in its financial fortunes due to economic turmoil in regions such as Asia or longer sales cycles. The company's latest quarterly performance rivals the annual revenues of one of its fiercest emerging rivals from the data side of communications, Cisco Systems.
Going forward, Lucent will increasingly feel the heat from other telecommunications equipment giants such as Alcatel, Siemens, and Ericsson, not to mention the refangled Nortel Networks that now includes Bay Networks technology.
News.com's Ben Heskett contributed to this report.