Lucent (LU

) posted a Q2 loss per share of $0.37 (pro forma). Salomon Smith Barney upgraded its rating on the shares to outperform from neutral.

Analyst Alex Henderson says the company's revenues were ahead of expectations, and its per-share result was roughly in line with forecasts. Given the sharp erosion at Cisco and Nortel, Henderson thinks the company's in-line results were significantly better than the fears harbored by most investors. The analyst thinks Lucent's balance sheet looks okay despite its steep operating losses. He notes its planned restructure charge increased from previously estimated $1.6B-$1.6B to at least $2.7B; benefits are seen at $2B plus. Henderson says operating costs are being trimmed faster than expected, and the company looks on track to reach breakeven within the year. He has a $13 price target.