Former telecommunications powerhouse Lucent Technologies (NYSE: LU) will be announcing quarterly results tomorrow, and investors are widely expecting a net loss of more than $7 billion per share.

No, I'm kidding. That's $7 billion total, or nearly $2 per stub. Of course, the estimates for Lucent are all over the yard, with the majority of those losses coming in the form of a massive restructuring charge. From an operating perspective, estimates range from a loss of $0.14 per share all the way down to $0.34 per share, which equate to total losses of $400 million to $1.2 billion total for the quarter.

Lucent's quarterly losses are not in any event going to approach those of Canadian House o' Pain members Nortel (NYSE NT) and JDS Uniphase (Nasdaq: JDSU), which added on tens of billions of dollars of goodwill writedowns on the way to utterly destroying the records for biggest quarterly losses. The numbers coming out of Lucent, however, are going to be big -- really big.

Lucent has lost more than 91% of its market value since December 1999, when analysts could not seem to say enough nice things about the company in spite of some really significant warning signs in its financials. Lucent has since had the double whammy of having to clean up its own mess and having to endure a violent drop in spending by telecom carriers.

A company once considered the linchpin of communications has therefore had to sell portions of itself off as scrap as a result, with spin-offs of Agere (NYSE: AGR.A) and Avaya (NYSE: AV) -- as well as the disposition of some core assets such as its fiber group to Furukawa and Corning (NYSE: GLW) -- in order to stave off bankruptcy.

A bad year
Where Lucent had 106,000 employees at the start of 2001, it will finish with less than 60,000, which, on top of all of the charges already taken, will net the company another $7 billion or so writedown for restructuring. And due to a combination of reduced sales and disposition of businesses, Lucent's revenues for the quarter could be below $5 billion, which would be a drop of 41% from last year. These are ungodly numbers for any company, much less one as august as Lucent.

As bad as it has been, it may be that this is the quarter in which Lucent attempts a final purge of all of "the bad stuff." This would be a nice change of pace: Sequoia Fund's Carley Cunniff is famously quoted as saying, "You need to be Sherlock Holmes to figure out what the heck Lucent is earning... and I can tell you they're not earning what they're reporting."

I once tried to work through Lucent's financials and found the same thing: Tables that crossed over to other tables, contradictory statements, vague references, and other things that did nothing to help investors understand the company. The only enlightenment I gained from the experience was that such reporting would be a great way for a company to hide something.

And here we are. Lucent's balance sheet grew distended, then burst, when some of its less financially-solid customers -- including now-bankrupt Winstar -- defaulted on payments. There may be more of these this quarter, and Lucent has an opportunity to come clean on all of the skeletons in its closets. Think about it: Investors' expectations really could not get much worse than they are right now. Enormous vendor-financing write-offs? Shocking. Massive increase in loan-loss reserves? Do tell. Horribly managed research and development efforts that need to be charged off? Just throw it in the cart.

I am not a huge fan of big-bath accounting, but everything about Lucent in the past year has been big bath, and the company's not done yet. As an individual investor, I can only hope the mismanagement of Lucent and its poor disclosure history to shareholders become an acid test for companies in the future, though I have seen very little from Lucent itself suggesting that it has learned its lesson.

Over the past year, Lucent has still made positive statements about future growth despite the lack of signals of a spending uptick by telecommunications carriers, calling for 10% to 12% growth through 2003. The company also gave several of its departing executives multi-million dollar severance packages, when their performance should have yielded them nary a penny.

Your investors are watching 
Well, Lucent, here's your chance. Analysts and investors expect nothing from you, and memories of the railroading we've received in the past may be long. Prove to us that you are not a has-been, done in by your own sloth and arrogance. Show us that your future shareholder communications will list all that investors need to know to make a decision about Lucent stock, good or bad. Prove that your executive compensation packages will reward truly outstanding performances.

Tell us the truth. Your shareholders are tired of hearing happy talk while their investments wither away. They're tired of executives reaping massive pay packages for miserable performance. And they're tired of surprises. Lucent's reputation may be as low as possible for a company that still does $20 billion plus in annual revenues, but if you want to change this then the status quo is simply not an option.

Earnings for Lucent come out tomorrow, and we can expect them to be bad. Investors ought to look past these numbers and look at what Lucent is REALLY telling its shareholders. A laundry list of outside influences that caused the poor performance -- without any acknowledgement whatsoever that the company has made mistakes and is striving to do better -- will be a sign that they have learned nothing.

Bill Mann hasn't learned anything either. He owns none of the companies mentioned in this article. The Motley Fool is investors writing for investors.