Vendor results - 25/1/06

Lucent reported, as expected, a 4Q05 net loss of $104m (or 2 cents per share), partly due to a $278m bankruptcy lawsuit payment (Winstar), on revenues down 12% to $2bn. Excluding the exceptional Winstar payment, Lucent should have reported a net income of 4 cents per share. Gross margin and operating expenses are good and under control, and if sales are down, it is due to a slowdown in spending by Verizon and Sprint Nextel, and delayed orders. The level of sales in the future will depend on gaining share with Cingular, and 3G network building in China.

LG Electronics reported a 5% drop in 4Q05 sales, but shipped 16.2m mobile handsets along with a 8% operating margin in its handset business.

Nokia could post a 2% drop in 4Q05 net profit to €1b, while sales could rise 6.3% to €10bn.