Lucent Reports Record 4th Quarter Increases OF 17.2 Percent for Revenue and 44.7 Percent for Net Income - Excluding One-Time Charges for Octel Acquisition

Business Wire, Oct 21, 1997

MURRAY HILL, N.J.--(BUSINESS WIRE)--Oct. 21, 1997--

COMPANY ALSO REPORTS RECORD FISCAL YEAR INCREASES OF 13.2 PERCENT FOR REVENUE AND 43 PERCENT FOR NET INCOME - EXCLUDING ONE-TIME CHARGES

Lucent Technologies today reported revenues increased 17.2 percent in the quarter ended September 30, 1997, to $6.933 billion -- and net income increased 44.7 percent to $369 million, or 57 cents per share, excluding one-time charges associated with the company's acquisition of Octel Communications Corporation.

The company's revenues for the fiscal year ended September 30, 1997 were $26.360 billion, an increase of 13.2 percent over the previous 12 months. For the 12 months ended September 30, 1997, Lucent's net income rose 43 percent to $1.507 billion or $2.34 a share, excluding one-time charges associated with the Octel acquisition. This compares to net income of $1.054 billion or $1.65 per share on a pro-forma basis* in the 12 months ended September 30, 1996, excluding business restructuring and other charges taken in December, 1995.

Including charges associated with Octel, the company reported a loss for the fourth quarter of $597 million or 92 cents per share. For the same period last year, Lucent reported net income of $255 million, or 40 cents per share on revenues of $5.918 billion. When the Octel charges are included for the fiscal year ended September 30, 1997, Lucent earned net income of $541 million or 84 cents per share.

"This is a great finish to our first fiscal year as an independent company," said Richard McGinn, Lucent Technologies CEO and President. "We believe these results demonstrate the enormous growth opportunities in the communications industry, and that our focus on the industry's fastest growing segments is paying off."

Revenues for the company's core businesses** increased 19.4 percent in the quarter. Revenues increased 17.8 percent for Systems for Network Operators; 21 percent for Business Communications Systems; 23.9 percent for Microelectronic Products and 1.6 percent for Consumer Products, compared to the year-ago quarter.

"Lucent is continually and quickly strengthening our business for growth," said McGinn. "Just in the past few weeks we've completed our acquisition of Octel, announced plans to acquire Livingston Enterprises, added to our growing data networking portfolio for businesses and service providers, and created the joint venture with Philips for the consumer terminal market. We intend to continue that pace to address a rapidly changing - and fortunately for us - rapidly growing industry."

Review of Operations

SYSTEMS FOR NETWORK OPERATORS

Revenues increased 17.8 percent over the year-ago quarter to $3.879 billion, led by sales of switching and wireless systems with associated software. The continuing demand for second lines in businesses and residences -- for uses such as Internet services, data traffic and faxes -- contributed to the group's increased quarterly revenues.

Domestic revenues increased approximately 14 percent for the final quarter of 1997 in comparison to the same period in 1996, led by sales to traditional service providers, and non-traditional customers including PCS (personal communications services) wireless providers and competitive access providers. International sales increased approximately 33 percent over the year-ago quarter, including increases in the Caribbean/Latin American region, the Europe/Mid-east/Africa region, and in China. International sales represented approximately 24 percent of revenues for the quarter.

Comparing the 12 months ended September 30, 1997 to the comparable year-ago period, the group's revenues increased 18.4 percent to $15.614 billion.