The networking equipment giant is facing tough times, again. It is time to close a chapter on what has been an extraordinarily challenging, prolonged, and unprecedented period for both Lucent and the industry.

That optimism might be shaken now as Lucent reported a weak first quarter (ending December 2005) results, thus ending a straight 16 quarter profit spree. The company reported a loss of $104 mn while its sales declined by 12%. That is no good news for the shareholders; the company's stock price has fallen by nearly 93% in the last five years. Russo's announcement for a cut in guidance for the current fiscal that ends in September 2006, though she exuded confidence that the other three quarters would be strong, has done little to ease shareholders' anxiety. For, Lucent which made a strong comeback only two years back it is nothing short of a terrible shock.

After getting spun off from AT&T in 1996 it delivered profits until the year 2000. However, after three years of turmoil due to missed opportunities and internal financial gaffes, which resulted in huge decline in revenues and loss of shareholders' confidence, the company did manage to make a comeback in 2004, as Russo executed the recovery plan with a dose of restructuring, cost-cutting, improved product portfolio and an overhaul of the firm's R&D policies.

But now a host of issues, from restructuring in the Chinese telecom industry, a major market, slackening demand for its wire line products to the 3G segment, come to haunt Lucent.

The Analyst Magazine, Lucent Technologies, R&D Policies, Chinese Telecom Industry, Communications Technology, Emerging Markets, IP Multimedia Subsystem, IMS, Multimedia Applications, Telecommunications Market, Chinese Market, Telecom Industry, VoIP Technology, Juniper Network.