Lucent last week warned investors that its operating results for the first quarter of its fiscal year would be lower than expected, with flat revenue and a drop in earnings.
The US telecommunications company says it expects to post revenue of between $9.8 billion and $9.9 billion for the quarter that ended on December 31, 1999, which is equivalent to the revenue it achieved in the same period a year ago. Earnings per share for the quarter are expected to range from 36 to 39 cents, compared to 48 cents during the same quarter last year, Lucent says.
That is significantly lower than the 54 cents per share predicted for Lucent by First Call/Thompson Financial, in its survey of 33 analysts.
"We are clearly disappointed with the results for the quarter," says Lucent Technologies Chairman and CEO Richard McGinn.
Lucent attributed the weak revenue and drop-off in earnings to a number of different factors, including customers delaying network deployments. Some of those deferrals were related to the Y2K problem, but more were due to certain customers facing delays in obtaining financing to build such networks, according to Lucent spokeswoman Lynn Newman.
Another factor was a drop-off in software revenue, because customers are spreading out their purchases more evenly throughout the year.
That also resulted in lower gross margins for Lucent, as did the cost of introducing and implementing a variety of new products, Newman says.
Greater than expected demand for Lucent's newer optical products also contributed to the earnings shortfall, as constraints in manufacturing and deploying these products meant that Lucent could not meet all the demand, Newman says.