Investors on both sides of the Atlantic will keep a close tab on Lucent Technologies Inc. when the company reports first-quarter results Tuesday. The sluggish-growing U.S. network vendor recently agreed to merge with France''s Alcatel.
Lucent is one of several major telecommunications companies set to unveil quarterly results next week. Others include the Sprint Nextel Corp., the newly constituted AT&T Inc. and Tellabs Inc.
Earlier this year, Lucent cut its 2006 sales forecast, citing lower orders in the U.S. and China. The company has been under pressure to improve growth and its stock performance, and the merger with the financially stronger Alcatel of France is viewed by Lucent executives as a way to accomplish those goals. The merged company would become a global giant in the network-equipment market.
For the fiscal second quarter, Lucent is expected to post a profit, excluding onetime items, of 3 cents a share on revenue of $2.24 billion, down from $2.34 billion a year ago, according to the consensus of analysts surveyed by Thomson First Call.
Executives have said they expect growth to accelerate in the second half of the fiscal year, so investors will look for clues that the rebound is underway.
AT&T Inc. , meanwhile, is slated to report its first full quarter of results since SBC Communications acquired the old AT&T Corp. in November. SBC then took the famed AT&T name as its own.
Investors already know that AT&T''s wireless business performed well. Cingular Wireless, which is jointly owned by AT&T and BellSouth Corp. , has reported net income of $354 million on a 9% increase in revenue to $8.98 billion. The nation''s largest wireless carrier added 1.7 million net customers in the first quarter.
What less clear is how well the company''s wireline business performed, particularly the long-distance operations of the former Ma Bell. AT&T''s ability to integrate acquired assets and to halt the decline in the voice business is crucial to the company''s goal of quickly making the huge acquisition add to profits.
AT&T is projected to earn 48 cents a share, excluding onetime costs and benefits, on revenue of $21.53 billion, including results from the old Ma Bell. AT&T reports Tuesday morning.
The company has led the way in the phone industry in signing up high-speed Internet customers. Wall Street will look for additional gains in data and Internet subscribers as well as broadband revenue.
If the results of Cingular Wireless are any indication, Sprint Nextel is also likely to show solid growth. The company, whose wireless business accounts for the lion''s share of revenue, is expected to earn 37 cents a share on revenue of $11.4 billion, up from $10.59 billion a year ago.
Analyst Todd Rethemeier estimates Sprint will add 1.5 million net new wireless subscribers.
Sprint is still a company in transition. The carrier plans to spin off its local phone business in the current quarter and aims to expand its partnership with the cable industry under which big cable operators would use Sprint''s network to offer wireless-calling plans of their own. Analysts believe the company could announce other initiatives to restructure operations and cut costs.
Sprint reports results Wednesday morning.
Tellabs , a supplier of phone-networking gear to AT&T and others, caps off a busy week with its quarterly report Thursday morning.
The vendor is likely to show a profit of 13 cents a share on revenue of $494.7 million, according to the consensus of analysts surveyed by Thomson First Call. What investors want to know is whether the spate of mergers among phone carriers and the recent Lucent-Alcatel deal will hurt the company''s revenue growth.
Big phone companies have paused some spending while a combined Lucent-Alcatel could provide stiffer competition. Some analysts believe Tellabs could also become an acquisition target.
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