Lucent Technologies, the telecommunications equipment maker, this afternoon warned it would miss its revenue target in the second quarter and said that ongoing difficulties in the service provider market would delay its return to profitability.
"The progress we are making with our restructuring program will enable us to deliver the fifth quarter in a row of sequential improvement in the bottom line," said Mr Frank D'Amelio, chief financial officer.
"However, large service providers continue to reduce or defer their spending as they rethink their business plans and conserve cash, which is having an impact on our top line."
Lucent said it now expected a "modest-to-10 per cent" sequential improvement in revenues for the January-March quarter, compared with its estimate of a 10-15 per cent increase, which it announced in January.
Uncertainty in the service provider market also meant the company's target for returning to profitability would slip from the fiscal year 2002 into 2003, it said.
"We are moving as swiftly as possible to return to profitability and positive cash flow. We will continue to monitor the market and, if necessary, take the appropriate actions to continue to align Lucent with current market conditions," said Ms Patricia Russo, the company's chief executive, who joined from Kodak in January.
Lucent also said that the long-awaited spin-off of Agere Systems, its 58 per cent owned optical components business, would be further delayed as it had failed to meet performance targets set under its credit facility. It said the spin-off was likely to take place in the third quarter.
Financial Times Service