After four years of ruthless cost-cutting and balance sheet repair, you can be fairly confident that Lucent Technologies (NYSE:LU) is fit for survival. But if you think that the telecom equipment giant is ready for prosperity, you had better think again.

With flat top-line performance and guidance for single-digit growth this year, Lucent offers investors little to get thrilled about.

Overall, Lucent reported net income of $174 million, a fraction of the $1.21 billion Lucent earned in the fourth quarter of 2004 and the $349 million it reported a year ago. The company's $2.34 billion in quarterly revenue was up 3% from last year but down 3% sequentially.

What explains the flat sales? It's not as though big telecom carriers aren't spending any money. Juniper Network's (NASDAQ:JNPR) strong Q4 results confirm that while carrier market spending may be flat overall, there are growth opportunities in the next-generation products such as voice over Internet protocol technology and broadband access equipment. It's just that Lucent -- despite throwing plenty of money at R&D and technology acquisitions -- has failed to gain any traction in those arenas.

To be fair, Lucent is building an enviable position in third-generation wireless technology. The company is starting to recognize revenue from contracts with Verizon (NYSE:VZ) and Sprint (NYSE:FON). 3G-system migration at wireless operators such as Cingular and Brazil's Vivo helped keep sequential sales growth from dropping into negative territory.

But taking a big step into the future is awfully tough when you've got one foot stuck in the past. A hefty chunk of Lucent's business remains in legacy systems -- markets that are steadily shrinking, not growing. Reliance on sales from older systems such as circuit switching and ATM and Sonet continues to be the stock's Achilles heel.

Responding to the Q1 figures, the market, correctly in my mind, sheared nearly 8% off Lucent's share value. Now at $3.23, Lucent trades at about 1.5 times estimated 2005 sales of $9.6 billion. That's slightly less expensive than Nortel (NYSE:NT) and Tellabs (NASDAQ:TLAB), but that doesn't mean the stock is cheap.

Fool contributor Ben McClure doesn't own shares of any companies mentioned in this article.