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Telecommunications systems

Lucent Technologies Reports 19.2 Percent Revenue Growth and Doubled Net Income

Strategic Insights

— 2 min read

Lucent Technologies announced a solid quarter of growth, with revenues increasing 19.2 percent on continuing operations and 14 percent on consolidated business, compared to the year-ago quarter. The company's net income more than doubled to $435 million, or 32 cents a share, excluding one-time charges. This significant growth is attributed to the company's focus on investing in technologies that will shape communications networks for the next millennium.

Key Takeaways:

  • Lucent's revenues for the quarter were $7.228 billion, an increase of 19.2 percent on continuing operations and 14 percent on consolidated business.
  • The company's net income more than doubled to $435 million, or 32 cents a share, excluding one-time charges.
  • Lucent's gross margin improved to 45.4 percent from 41 percent in the year-ago quarter, reflecting a more favorable mix of products and services as well as improved management of costs.
  • The company's selling, general and administrative expenses (SG&A) accounted for 21.7 percent of revenues in the quarter, compared to 22.1 percent in the period a year-ago.
  • Lucent's research and development spending increased to 13.1 percent from 12.9 percent during the 1997 period, due to investments in high growth areas such as wireless, data networking, optical networking, and switching and access.
  • The company announced several major contracts, including a five-year strategic agreement with SBC Communications valued at up to $2.4 billion, a $200 million contract to help Bell Atlantic build a next generation data network, and a contract with Saudi Telecommunications Co. valued at $810 million.
  • Lucent formed an alliance with Motorola to develop next-generation Digital Signal Processor (DSP) technology and acquired SDX Business Systems plc to target the fast-growing European market for call centers.

Statistics:

  • Net income: $435 million (32 cents a share), excluding one-time charges
  • Revenues: $7.228 billion (19.2 percent increase on continuing operations and 14 percent increase on consolidated business)
  • Gross margin: 45.4 percent (improved from 41 percent in the year-ago quarter)
  • Selling, general and administrative expenses (SG&A): 21.7 percent of revenues
  • Research and development spending: 13.1 percent (increased from 12.9 percent in 1997)
  • Major contract values:

+ SBC Communications: up to $2.4 billion

+ Bell Atlantic: $200 million

+ Saudi Telecommunications Co.: $810 million

Sources:

  • "Revenues Up 19.2 Percent On Continuing Operations Lucent Technologies today reported that net income more than doubled to $435 million, or 32 cents a share(1) for the third fiscal quarter ended June 30, 1998, excluding one-time charges."
  • "The company's revenues for the quarter were $7.228 billion, an increase of 19.2 percent on continuing operations(2) and 14 percent on the consolidated business, compared with the year-ago quarter when revenues were $6.340 billion."
  • "For the nine months ended June 30, 1998, net income increased 52.8 percent to $1.739 billion, or $1.31 a share, excluding one-time charges related to the company's acquisitions of Livingston Enterprises, Prominet Corporation, Yurie Systems, and Optimay, as well as the gain on the sale of its former Advanced Technology Systems business."
  • "Revenues for the nine months ended June 30, 1998 were $22.109 billion, an increase of 19.4 percent on continuing operations and 13.8 percent overall."
  • "Lucent unveiled an extensive portfolio of Internet Protocol (IP) products for service providers that promises to revolutionize the way data, voice and video are handled in today's evolving networks."

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