Lucent Technologies Inc. said Wednesday it may sell its Optical Fiber Solutions unit as part of its effort to focus more on systems software and services for communications infrastructure.
The Murray Hill, N.J., company is reviewing possibilities of selling or forming a joint venture with the unit that focuses on advanced fibre optics and related technologies for the telecommunications industry, said Michelle Davidson, a company spokeswoman. During the next few months, Lucent will review which option best benefits its company, employees and shareholders, she said.
The Optical Fiber Solutions unit designs and manufactures optical fibre, fibre cable, specialty fibre components and fibre connectivity apparatus, the company said. Lucent’s fibre business has 6,300 employees with its headquarters and largest manufacturing centre in Norcross, Ga. The unit saw revenue of about US$2 billion for fiscal 2000, Davidson said.
The business unit has been in the midst of a $1 billion expansion program, which includes significant expansion to the Norcross facility, Lucent said. In addition, the business unit has commenced a $250 million investment to enlarge its AllWave metro fibre production capacity, the company said.
Rumblings of Lucent selling the Optical Fiber Solutions unit first emerged in February. At the time, The Wall Street Journal reported Lucent could fetch between $4 billion and $8 billion for the Optical Fiber Solutions unit, which is second only to Corning Inc. in the production of fibre optic cable.
Lucent in recent months has come upon tough financial times. In late January, the company announced its first quarter 2001 results, which included a $1.02 billion loss and the cutting of 10,000 jobs.
Lucent also is dealing with an investigation of its accounting practices by the U.S. Securities and Exchange Commission (SEC). Federal regulators began looking at Lucent’s financial books after the company trimmed its revenue for the fourth quarter of 2000 by $125 million after it discovered a “revenue recognition” issue. In December, Lucent announced it was actually a $679 million revenue reduction. Lucent is cooperating with the SEC and sharing information about the accounting discrepancy, Davidson said.
In October, the company ousted Rich McGinn as chairman and CEO. The company, at the time, said it needed to change its leadership after five quarters of not meeting earnings forecasts. Henry Schacht who served as the company’s chairman and CEO replaced McGinn. Schacht is serving as chairman and CEO until the company locates a new chief.
In Canada, Lucent Technologies’ headquarters is in Markham, Ont. and can be reached at http://www.lucent.ca.
