For the fourth quarter, the Jersey-based maker of telecom gear posted a net profit of $99 million. However, the net profit applicable to common shareholders was $77 million, up from a net loss of $2.88 billion in the same period last year.
Lucent admitted the profit was aided to the tune of about $0.02 a share by a reduction of reserves for restructuring actions, bad debt, financing recoveries, and customer and supplier credits. The company also took a $594 million non-cash charge in the quarter related to equity for management pension plans.
Despite the fact that sales were down 10.9% at $2.02 billion, from $2.27 billion this time last year, Lucent was one of the few companies that gained on the news of its results.
The company claims it has completed its restructuring initiatives, reduced its total expenses by about $5.6 billion year-on-year and implemented plans to broaden its revenue base in areas like services, government contracts and outside the US.
The results are significant as this was Lucent’s first profit since March 2000, and marks the end of 13 straight quarterly net losses that began back when the telecoms bubble burst.
However, the return to the black has come at a price. The company has cut its workforce from 106,000 at its peak to 34,500 people as of September 30. For the full year ending September 30, Lucent posted a net loss of $1.16 billion, down from a net loss of $11.94 billion, on revenue down 31% at $8.47 billion from $12.32 billion in fiscal year 2002.
It ended the quarter with $4.5 billion in cash and short-term investments, $400 million lower than the previous quarter. The decrease was primarily due to the repurchase of $500 million in convertible securities and debt obligations, resulting in an annual cost saving of $50 million.
This article was based on material originally published by ComputerWire.
