Lucent Technologies

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Alcatel-Lucent USA, Inc., originally Lucent Technologies, Inc. is a technology company composed of what was formerly AT&T Technologies, which included Western Electric and Bell Labs. It was spun off from AT&T on September 30, 1996.

Lucent was purchased by Alcatel SA of France to form Alcatel-Lucent on December 1, 2006.[2]



One of the primary reasons AT&T chose to spin off its equipment manufacturing business was to permit it to profit from sales to competing telecommunications providers; these customers had previously shown reluctance to purchase from a direct competitor. Bell Labs brought prestige to the new company, as well as the revenue from thousands of patents.

At the time of its spinoff, Lucent was placed under the leadership of Henry Schacht, who was brought in to oversee its transition from an arm of AT&T into an independent corporation. Richard McGinn succeeded Schacht as CEO in 1997. Lucent became a "darling" stock of the investment community in the late 1990s, rising from a split-adjusted spinoff price of $7.56/share to a high of $84. In 1997, Lucent acquired Milpitas based voice mail market leader Octel Communications Corporation for $2.1 billion, a move which immediately rendered the Business Systems Group profitable. By 1999 Lucent stock continued to soar and in that year Lucent acquired Ascend Communications, an Alameda, California-based manufacturer of communications equipment for US$24 billion. Lucent held discussions to acquire Juniper Networks but decided instead to build its own routers internally.

On January 6, 2000, Lucent made the first of a string of announcements that it had missed its quarterly estimates, and when it was later revealed that it had used dubious accounting and sales practices to generate some of its earlier quarterly numbers, Lucent fell from grace.

By October 2002, when its stock price bottomed at 55 cents per share, Henry Schacht had been brought back on an interim basis to replace McGinn. Patricia Russo was named permanent Chairman and CEO, succeeding Schacht who remained on the Board of Directors.[3]

In April 2000, Lucent sold its Consumer Products unit to VTech & Consumer Phone Services. In October 2000, Lucent spun off its Business Systems arm into Avaya, Inc., and in June 2002, it spun off its microelectronics division into Agere Systems. The spinoffs of enterprise networking and wireless, the industry's key growth businesses from 2003 onward, meant that Lucent no longer had the capacity to serve this market. [4]

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