Earnings Reports for Jan. 24

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Lucent to Cut 10,000 Jobs

Lucent Technologies posted today a first-quarter loss and said it would cut10,000 jobs, or 10 percent of its work force, as part of a planto reduce expenses by $2 billion and recover from recent profitshortfalls and product development missteps.

It said it would take a charge in the second quarter of$1.2 billion to $1.6 billion to cover a restructuring plan thatwill include the job cuts, as well as the elimination of someproduct lines and the write-down of some assets.

Lucent, the world's largest telecommunications equipmentmaker, said it lost $1.02 billion, or 30 cents a share, in itsfiscal first quarter, ended Dec. 31, compared with a profit of$1.08 billion, or 33 cents a share, a year ago.

The loss was deeper than Wall Street's already reducedexpectations of a loss of 27 cents a share, according toresearch firm First Call/Thomson Financial.

Its quarterly pro forma revenues from continuing operationsfell 26 percent to $5.84 billion.

Lucent slashed its growth outlook several times last yearas it fell behind rivals in the key optical networking market,and struggled with manufacturing constraints and decliningdemand for its core telephone equipment products.

The turmoil, which led to the ouster of Lucent Chairman andChief Executive Richard McGinn in October, dragged Lucent'sstock down 60 percent over the past year.

The job cuts, which were widely expected, will primarilyreduce duplicated marketing, sales and administrative jobs,Lucent said, adding that it will continue to hire workers inhigh growth areas of its business. The company has about106,500 workers, excluding 16,500 workers from its AgereSystems microelectronics unit, which will be spun off.

As part of the restructuring, Lucent said it will reducecapital spending by $400 million by the end of the fiscal year.It also will significantly expand its previously announcedplans to use contract manufacturers, which will result in about6,000 fewer positions by the end of the fiscal year.

To ensure that its cash flow needs are adequately met,Lucent said it got a new $4.5 billion credit facility arrangedby J.P. Morgan and Salomon Smith Barney.BACK TO TOP

Chevron Smashes Expectations

Cheron, the No. 2 U.S.oil company, said today fourth-quarter earnings rose 88percent, easily surpassing Wall Street expectations, driven bysharply higher oil and natural gas prices, a modest rise inproduction volumes and better refining and marketing results.

Chevron, which is acquiring rival Texaco Inc., saidearnings, excluding special items, rose to $1.54 billion, or$2.39 per diluted share, from $819 million, or $1.24 perdiluted share, a year earlier. Revenues rose 23 percent to$13.5 billion.

After stripping out foreign currency losses of $8 million,earnings excluding special items came to $2.41 per share.Analysts had expected earnings per share on the same basis of$2.21, according to First Call/Thomson Financial.

Chevron's stock price appears to have drawn little benefitfrom strong oil and gas prices. The shares are off some 6percent so far this year and fell 2.5 percent last year, wheninvestors showed little interest in integrated oil stocks asthey chased high-flying technology issues.

The bulk of Chevron's earnings came from its "upstream"exploration and production business, which benefited from someof the highest oil and natural gas prices in a decade and a 3percent increase in production volumes.

Operating earnings from exploration and production rose 53percent to $1.26 billion.

The average price Chevron received for its crude oil in theUnited States rose 33 percent to $28.75 a barrel, compared withthe fourth quarter of 1999. The average price it received forits natural gas in the United States more than doubled to $5.86per thousand cubic feet.

Chevron said its "downstream" refining and marketingbusiness, which transforms crude oil into marketable productssuch as gasoline, posted operating earnings of $336 million,versus a loss of $6 million in the fourth quarter of 1999.

Results from the U.S. downstream business rebounded in thesecond half of the year as refined product price increasesoffset the higher costs of higher crude oil feedstocks.

In the fourth quarter Chevron benefited from improvedreliability of its U.S. West Coast refineries and strongermargins for jet fuel, diesel fuel and motor gasoline.

Outside the United States, results of Chevron's refiningand marketing joint venture with Texaco, Caltex, remaineddepressed as tough competition in the Asia-Pacific areadampened marketing margins.

Chevron's earnings excluding special items for the whole of2000 rose to $5.44 billion from $2.29 billion in 1999.

Chairman and Chief Executive Dave O'Reilly said 2000 hadbeen the most profitable year in the company's history, withChevron earning a return on capital employed of 22 percent.

O'Reilly said Chevron had significantly strengthened itsbalance sheet in 2000, reducing its debt by $2.7 billion andbuying back $1.4 billion of its common shares.BACK TO TOP

High Oil Prices Fuel Success at Texaco

Texaco, the No. 3 U.S.oil company, said today fourth-quarter income more thandoubled, beating Wall Street estimates, aided by high crude oiland natural gas prices.

White Plains, N.Y.-based Texaco, which is being acquired byChevron, said fourth-quarter income before special itemsrose to $840 million, or $1.55 per share, from $370 million, or67 cents a share, in the same period a year ago.

Analysts on average were forecasting earnings of $1.51 ashare, according to First Call/Thomson Financial, which tracksestimates. Revenues for Texaco rose to $14.4 billion from $10.6billion a year ago.

Texaco, along with other major oil companies, benefitedduring the quarter from a run-up in crude oil and natural gasprices to some of the highest levels seen in a decade.

Net income for the period was $545 million, up from $318million a year ago.

While its daily production fell by 12 percent in the fourth-quarter and 10 percent for the year, partly due to salesof properties, Texaco's exploration and production businessstill turned in sharply higher results than a year ago.

U.S exploration and production income before special itemsrose to $547 from $243 million in the corresponding period lastyear, Texaco said. International income from the same businessrose to $271 million from $195 million a year ago.

Before special items, its refining and marketing businessalso posted better results, helped by stronger profit marginson fuels such as gasoline and heating oil.