The company said the 11 September terrorist attacks on the US stalled spending on telecoms equipment, but it expects to return to profitability next year.
Lucent reported a net loss of $2.59 (£1.81) a share for the quarter ending 30 September. The company's revenue for the quarter also fell by 28% - from $7.2bn to $5.2bn (£3.6bn). Analysts had predicted a loss of $0.23 a share.
For the financial year ending 30 September, Lucent reported a net loss of $16.2bn (£11.4bn), or $4.77 a share. This includes one-off charges of $11.4bn relating to Lucent's cost-cutting measures, which included redundancies, discontinued operations and accounting changes.
Lucent shares fell by 4.06% following the announcement.
Analysts and industry watchers were sanguine about the company's losses. "All things considered, not bad," said Maribel Dolinov, a senior analyst for optical networking and supplier-to-carrier relationships at Forrester. Lucent's recent stock offering gave the company some financial cushion to ride out the storm, she added.
However, Lucent's gross margins are a cause for greater concern, said Dolinov. The company has slashed prices in order to clear inventory and keep revenue stream flowing.
"The gross margins are deplorable. It's all but impossible to run a profitable business like that," Dolinov said. "And now that the carriers have all come out with their financial statements, the equipment providers are re-crafting their predictions."
All of the major US telecoms service providers have cut projections for capital expenditures next year, which will mean that Lucent's target market will be down by 10% or more, said Henry Schacht, Lucent's chief executive.
Schacht said Lucent is counting on an improvement of gross margins to 35%, some rebound in the market, and an end to one-time charges, such as this quarter's $8bn charge. Lucent has made "significant progress" with its restructuring plans, Schacht said, with job cuts of 29,000 already made and a further 15,000 to 20,000 due by the second quarter of 2002.