Lucent's fiscal woes are carrying over from fourth quarter, the company says. Weak industry conditions will cause its fiscal first quarter loss to be much wider than expected, and the company is taking steps to halt the losses.
The earnings warning is just another of many during this current slump in the telecommunications sector that is affecting everyone from long-distance companies to wireless carriers, broadband service providers and failing dot coms—and companies like Lucent whose products make up the backbone of modern communications.
Lucent says it now expects a pro forma loss of 25 cents to 30 cents per share on continuing operations in the fiscal first quarter, ending Dec. 31, far from analyst's estimates of a more moderate loss of one cent, according to market research firm First Call/Thomson Financial.
Like many other floundering companies, Lucent has a plan that involves cutbacks. The company says it will cut more than $1 billion in costs as part of an expected restructuring, reducing its job force and writing off assets. Analysts are projecting the company to cut about 12,000 jobs, or about 10 percent of its work force.
As it overhauls its business, Lucent will restructure its product lines, consolidate the functions of its corporate centers, eliminate duplications in its marketing operations and streamline sales support.