Lucent Technologies warned that sagging sales in the U.S. and China will result in a slump in revenues and earnings for the quarter ending June 30. Revenue will be down 13 percent year-on-year to $2.04 billion. The warning marks the second such lowered forecast from the company, which in May announced plans to merge with rival Alcatel. Consolidation between the major telephone companies has led to a period of weakened sales in the telecom equipment sector, which in turn has led to consolidation like the Alcatel-Lucent merger. Lucent chairwoman and CEO Patricia Russo blamed the weak sales partly on "a slowdown in spending on some of our current-generation wireless solutions." Some say good news is a few quarters away, Lucent's IMS triple-play contracts should bring in substantial sales sometime next year.
For more on Lucent's lowered revenue projection:
- see this WSJ article (sub. req.)
ALSO: Lucent's lowered forecast also lowers Alcatel's stock price. Article (WSJ sub. req.)
PLUS: Alcatel and Lucent issue press release on timing of proposed merger along with key milestones. Release