Earnings News Batters LR Index
The steady stream of bad earnings news continues to pressure the Light Reading Index, our list of leading optical networking equipment vendors and components makers. The Index, this morning trading down 0.86 to 101.91, is at an all-time low and is nudging the important level of 100. The Index has not dropped below 100 since it began tracking stocks in January 2000.
AT&T's actual second-quarter 2002 loss totaled $12.7 billion, or $3.49 a share, compared to a loss of 10 cents a share during the year-ago quarter. The company's revenues fell 6.2 percent during the quarter to $12.1 billion, and it expects a slightly higher rate of revenue decline during the next quarter.
However, AT&T's loss wasn't as bad as it looks on paper. The quarterly numbers took into account a $13.1 billion writedown in the book value of the AT&T Broadband cable unit that Comcast Corp. (Nasdaq: CMCSA, CMCSK) is buying.
SBC reported actual second-quarter earnings of $1.85 billion, or 55 cents a share, compared with the $2.07 billion, or 61 cents a share, it reported a year ago. Its revenues for the quarter were $13.1 billion, nearly 4 percent off the $13.6 billion the company reported during the year-ago quarter.
Lucent's actual quarterly loss for its third fiscal quarter of 2002 was $7.9 billion, or $2.30 a share, compared to a loss of $1.9 billion, or 55 cents a share during the year-ago quarter (see Lucent Loses $7.9B, Plans Layoffs). Its revenues fell to $2.95 billion during the quarter from $5.89 billion in the year-ago quarter -- a 50 percent drop. The company says it will cut 7,000 more jobs by the end of this year; it had 53,000 workers as of June 30.
All the while, capital spending guidance coming from carriers is either holding or dropping off. AT&T's projected capital spending for 2002 remained in the range of $3.8 billion to $4.2 billion. SBC, however, now says its 2002 capital spending will be "below $8 billion," down more than $1 billion from its previous guidance, which was a range of $9.2 billion to $9.7 billion. This follows BellSouth Corp.'s (NYSE: BLS) announcement yesterday that it would spend $500 million less on telecom and networking gear than it had originally anticipated (see No Relief From BellSouth).
Just before noon, shares of Lucent were down $0.39 (18%) to $1.71. SBC shares were off $0.94 (4%) to $23.02. AT&T bucked the trend as its stock climbed $0.01 (11%) to $9.53.
— Phil Harvey, Senior Editor, Light Reading