Lucent Posts Second Straight Quarterly Profit - InformationWeek

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Lucent Posts Second Straight Quarterly Profit

The telecommunications equipment maker held down costs and boosted revenue and gross margins on the way to a $338 million first-quarter profit.

MURRAY HILL, N.J. (AP) -- Telecommunications gear maker Lucent Technologies reported a $338 million first-quarter profit as it held down costs, boosted revenues, and nearly doubled its gross margin.

The company on Wednesday reported its second straight profitable quarter after a streak of 13 losing quarters during the worst of the telecommunications industry slump.

The profit for the October-December quarter equaled 7 cents per share. Excluding a host of one-time items, net income was $156 million, or 3 cents per share, 4 cents better than the penny loss forecast by analysts surveyed by Thomson First Call.

A year earlier, Lucent posted a net loss of $264 million, or 11 cents per share. Last quarter, its first in the black since 2000, Lucent reported net income of $99 million, or 2 cents per share.

Revenues totaled $2.26 billion, up 9 percent from $2.08 billion in its fiscal 2003 first quarter.

Costs for producing products and providing services, research and development spending, and sales and administrative expenses were all down sharply. That boosted Lucent's gross margin to 40.7 percent, nearly double the 21.9 percent margin a year earlier.

"We are clearly seeing evidence that the market is stabilizing," said Lucent chief executive Patricia Russo.

Chief financial officer Frank D'Amelio said the company expects revenues to remain flat or increase slightly compared with last year.

"While we may still see some quarterly ups and downs, given this quarter's results we expect to report a profit for the year," excluding some legal expenses, he said.

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