Lucent chief goes as profit slides

Lucent Technologies has reported disappointing results for its fourth quarter ended 30 September. Turnover was $9.4bn and profit $600m, down from $768m in the same period last year.

Lucent Technologies has reported disappointing results for its fourth quarter ended 30 September. Turnover was $9.4bn and profit $600m, down from $768m in the same period last year.

In an attempt to improve its financial performance, the company has ousted its chief executive, Richard McGinn. In a meeting to review its recent performance and outlook for the current quarter, Lucent's board of directors decided that an "immediate change in leadership was necessary".

Henry Schacht has been appointed chairman and chief executive, a position he retired from in 1997. He was chief executive and chairman of Lucent from 1995 to 1997, and remained as chairman until 1998.

In March, Schacht was named chairman of the Lucent spin-off Avaya, where he will remain on the board of directors but will step down immediately from his position as chairman.

Franklin Thomas, senior director at Lucent, said: "This was a difficult decision taken after considerable deliberation. Richard has made significant contributions to Lucent over the past five years because he focused the company on the growth markets and key technologies that would ensure its future prosperity. However, the board felt a different set of skills was required at this point in the company's life."

Lucent warned that it expects turnover from continuing operations for the current quarter to decline by about seven per cent and profit from continuing operations to break even.

The company said it also expects sequential improvement from operations in each quarter for the rest of the financial year, but the predictions do not include the effect of plans for a business restructuring charge.

It also confirmed plans to move ahead with spinning off its micro-electronics business and to sell its power systems business.

Last month, Lucent lost John Drew, another senior executive, as the company continued with its reorganisation. Drew, former chief executive of Lucent's network care professional services arm, left as the company combined its three services divisions into one.