Even though telecommunications equipment maker Lucent (NYSE:LU) has done a tremendous restructuring job, it is still a company in transition. Its legacy business of wireline equipment is continuing to deteriorate, posting a 12% drop in revenues to $592 million for the company's second quarter. Net of gains on bad debt recovery and favorable tax treatments, income for the quarter came in at $211 million, a 45% decline.

Yet the company had a decent quarter overall. It recorded a net profit of $372 million, down slightly from $387 million in the same period a year ago, while revenues increased 7% to $2.34 billion.

It helped that Lucent had the foresight to not exclusively focus on cost-cutting when it engaged in its massive restructuring. In fact, the company has invested in a variety of wireless technologies, and that's where the growth is taking place. Its Mobility Solutions division posted revenues of $1.17 billion, a 14% gain from the same period a year ago. The wireless business should continue to grow.

However, the big picture for Lucent involves the deployment of next-generation telecom networks that can effectively handle voice over Internet protocol technology, mobile high-speed data, video, and so on. Getting this done requires tremendously complex equipment, and Lucent appears to have a strong product line that's up to the task, thanks in large part to a variety of acquisitions over the past few years. Lucent has bought its way into products that will help in implementing optical transport, VoIP, broadband access, and IP routing.

Lucent is also busy signing contracts. In the past quarter, it struck deals with China-based Guangdong Telecom, Essent Kabelcom in the Netherlands, and Japan's Heisei DenDen, among others.

However, since getting customer wins can take a year or more, the impact of Lucent's recent activity is not expected to be felt until 2006 or 2007. Lucent expects to grow in the meantime, but it still has a lot of competitors, including Nortel (NYSE:NT), Alcatel (NYSE:ALA), and Cisco (NASDAQ:CSCO).

That's a long time for investors to wait, especially given that there is some degree of uncertainty over how successful Lucent's moves will be. And given the lack of direction in Lucent's stock price, it appears that investors don't want to wait. Perhaps more importantly, the company has not positioned itself to capture extraordinary returns on expected market conditions -- it's forecasting growth rates in line with the broader telecom markets. Be careful before investing in this company.

Fool contributor Tom Taulli does not own shares of any companies mentioned in this article.