Faced with declining orders from major North American telecommunications companies for its switches and other equipment, Lucent warned yesterday that its revenue in the current quarter would decline as much as 15% from the previous three months.
Under revised credit terms, Lucent can draw on its credit line if it loses no more than $325M in the July quarter, or $300M in the quarter starting Oct. 1.
Lucent CEO: "Service providers continue to constrain their capital spending to conserve cash, which is clearly affecting our top line."
If the telecom market fails to recover within the next year (a distinct possibility), and Lucent's revenues decline at the same rate, they will be operating at 52% of current revenues by June 2003. It would then seem necessary to reduce staff levels much more sharply than is currently planned, making it difficult to keep a coherently functioning organization in place.
Lucent Warns on Sales; Its Shares Fall Further