Lucent Technologies Inc. lost $2.81 billion in its fourth quarter, ending a fiscal year in which the nation's largest maker of telecommunications equipment lost almost $12 billion as its biggest customers continued to hold back spending.

"We acknowledge that this last quarter was pretty ugly," chief executive Patricia F. Russo said yesterday in a conference call with analysts. It was Lucent's 10th consecutive quarterly loss.

But Russo said that Lucent expects revenue, which fell to $2.28 billion last quarter, to increase to $2.5 billion by the second quarter of 2003, and that the company will again be profitable by the end of next year. This week, the company announced contracts to build major wireless networks in China and India, an anticipated area of growth for Lucent. "I actually think there is light at the end of the tunnel," Russo said in an interview yesterday.

Telecommunications analyst James N. Kelleher of Argus Research said Lucent's return to profitability depends on increased spending from its major U.S. customers, including Verizon Communications Inc., AT&T Corp. and BellSouth Corp., who are themselves struggling. "Lucent is totally dependent on the carriers and if the carriers don't come through than Lucent is in tough shape," Kelleher said.

Another telecommunications analyst, Susan Kalla of Friedman, Billings, Ramsey & Co., was skeptical yesterday that the major telephone companies would start spending soon. "There is no reversal obvious in the next six to 18 months," Kalla said.

Despite the huge loss (84 cents per share), Lucent's fourth-quarter performance was significantly better than it was in the quarter a year ago, when the company lost $8.8 billion ($2.59). Sales in the quarter fell 56 percent from the $5.16 billion the company reported last year.

Lucent's stock price yesterday rose 4 cents to close at 76 cents a share.

Lucent reported a loss of $11.8 billion ($3.49) for fiscal 2002, compared with $16.2 billion ($4.77) in 2001. Revenue for the year was $12.2 billion, down 37 percent.

Lucent improved its bottom line by eliminating jobs and reducing spending on research and development at its Bell Labs. Lucent began the year with 62,000 jobs and expects to cut that number almost in half through layoffs, spinoffs and attrition. The company expects to have about 35,000 employees by next March; three years ago, it had more than 150,000.

Three years ago, Lucent saw demand for its telecommunications equipment explode as fledgling companies entered the market to compete with established monopolies. Eager to cash in on the sudden boom in competition, Lucent offered its new customers generous financing. Now it is feeling the effects of those deals, which have led to more than $4 billion in losses. During the fourth quarter, the company wrote off $250 million related to a default by a single unidentified customer.

Russo said Lucent had $4.4 billion in cash and short-term investments as of Sept 30. Spending is expected to exceed revenue for the short term, although the company expects to have more than $2 billion in cash by the end of 2003, Russo said.

But Kalla remains concerned about the rate at which the company is burning cash. "They blew through about $1 billion in a quarter; that's incredible," Kalla said.

Last week, Lucent, once one of the highest-valued companies on Wall Street, announced that it would ask shareholders to approve a reverse stock split in an effort to increase the price of a share to $15 to $25. Lucent was in danger of being delisted by the New York Stock Exchange after its shares traded on average for less than $1 over 30 days.