Lucent Fires Chairman, CEO McGinn
Monday, October 23rd 2000, 12:00 am
By: News On 6
NEW YORK (AP) â€” Lucent Technologies' board has forced out Richard McGinn as chairman and chief executive after a series of financial disappointments.
The maker of telecommunications equipment said Monday that former board chairman Henry Schacht, 66, would replace McGinn in both posts and will lead the search for his successor.
At the same time, Lucent warned that its earnings for the current quarter would be below earlier expectations. It said it now expects earnings growth from continuing operations to remain flat on a 7 percent decline in revenue.
Analysts surveyed by First Call/Thomson Financial had been looking for Lucent to earn 23 cents a share before charges for final three months of 2000.
Shares of Lucent were down 25 cents to $22.38 in early afternoon trading on the New York Stock Exchange.
The company, which is based in Murray Hill, N.J., said it would report results for the quarter that ended Sept. 30 after the close of the stock market Monday. Analysts surveyed by First Call/Thomson are looking for earnings of 17 cents per share for the quarter.
Earlier this month, Lucent shares skidded 30 percent to a two-year low after the company warned for the third time this year that profits wouldn't meet expectations. Lucent's stock is the second-most widely held in the nation, behind MetLife, with about 5.3 million shareholders.
Lucent, which was spun off from AT&T in 1996, has had problems in the growth of its business despite soaring demand for the network equipment being used to expand the Internet.
The board said in a statement Monday that it had reviewed Lucent's recent performance and outlook for the current quarter at a meeting over the weekend, and ``determined that an immediate change in leadership was necessary.''
Schacht was chairman of Lucent from 1995 to 1997.
``This was a difficult decision made after considerable deliberation,'' Lucent director Franklin Thomas said in a statement on behalf of Lucent's board.
He said while McGinn had ``made significant contributions to Lucent over the past five years ... the board felt a different set of skills was required at this point in the company's life.''
Schacht said the issues Lucent faces ``are ones of execution and focus, and they are fixable.''
On the Net: http://www.lucent.com