Lucent Technologies Inc.'s fourth-quarter results surpassed most analysts' expectations as it returned a profit of $369 million, or 57 cents per share, on sales of $6.93 billion.
Analysts said the company's strong growth in microelectronic products, particularly cellular communications devices, was mainly responsible for the 17.2 percent climb in revenue from the same quarter last year.
"You've got a company that's really coming of age," said Don Collier, president of ProLytix Corp., a Santa Barbara, Calif., stock tracker. "They're moving fast for the emerging communications markets in places like China, India and other largely untapped markets. Wireless and cellular products are becoming as common in these places as they are in New York City."
Lucent increased its sales for the fiscal year 13.2 percent over last year's, to more than $26.3 billion. The net income of $1.5 billion, or $2.34 per share, was 47 percent higher than last year's.
"It's a huge company that's contending with all the problems that come with its size and capitalizing on all its advantages," Collier said. "Integrating a company the size of Octel into basically another business division, and allowing those people to continue doing what they do best, will pay big dividends. It wouldn't surprise me at all to see these same growth rates through the next fiscal year."
Lucent Technology shares rose more than $1.50 per share Tuesday in early trading before closing down 6 cents per share to $85.75.
"From a technical perspective, it's not a great stock right now," said Daniel Mandresh, an analyst at Merrill Lynch. "It's got potential for much better bottom-line numbers in a quarter or two, but it's hard to quibble with these results. We'll have to see how they integrate Octel and Livingston Enterprise into their culture before we'll know what direction this story is headed."
Lucent officials seem to feel it's headed in the right direction.
"This is a great finish to our first fiscal year as an independent company," said chief executive Richard McGinn in a release. "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."
Sales in its business communications systems improved 21 percent from the year-ago quarter to $1.8 billion, driven mainly by sales of the Definity enterprise servers and various messaging systems and call centers.
Systems for network operators increased 17.8 percent compared to the same period last year, while consumer products made a modest jump of 1.6 percent.
"It's not just the revenue growth, but where they are getting it," Collier said. "Every conceivable nook and cranny is getting a once-over. They have inroads in every facet of communications."
Lucent Technologies Inc. is based in Murray Hill, N.J.