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Lucent Reports Earnings, Spin-Off
Chris Rugaber (TMF RFK)
July 20, 2000
Lucent Technologies (NYSE: LU) , the world's largest telecom equipment maker, today reported pro-forma earnings per share (EPS) from continuing operations of $0.30, on income of $1.007 billion, a 30% increase from last year's third quarter. Revenue from continuing operations was up 20% to $8.713 billion, compared to $7.245 billion in the year-ago quarter. Including acquisition and other charges and results from discontinued operations, Lucent posted a loss of $301 million, or $0.09 per share, compared to net income of $763 million, or $0.24 per share, in the year-ago period.
Separately, the company also announced plans to spin off its fast-growing microelectronics division, which includes optoelectronics components and integrated circuits. Lucent is planning to sell 20% of the company in an IPO scheduled for the first calendar quarter of next year.
Lucent CEO Richard McGinn noted, "With today's announcement of our spin-off of the microelectronics business, we will create two vibrant new companies positioned to lead in the Internet infrastructure and communications semiconductor markets. The fact is, we are dividing Lucent in order to accelerate growth.... Lucent will now be totally focused on the largest network buildout in history, a $225 billion market opportunity this year."
The company also noted in a press release that it expected fourth-quarter pro forma revenue to grow 15%, and pro forma earnings "roughly in line with revenue growth," which would miss expected earnings of $0.42 per share. In addition, Lucent forecasted a 15% decline in pro forma earnings for the first quarter of 2001.
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