The merger resulted in the reduction of more than 12,000 jobs between the two banks and merger related expenses of approximately $1.9 billion.

The operating income excluded both the merger expenses and $3.5 million other "intangible" charges required under accounting rules.

Including one-time charges and profits - like merger expenses and gains from sales of investments - Lucent reported earnings of $1.25 billion, or 38 cents a share.

"I don't like it when they keep having nonrecurring merger related expenses," said Mr. Hanley of UBS Securities.

Net income included costs of 2 cents a share for merger expenses.

It said that $165.3 million of merger expenses (bonuses paid to some Hutton brokers and the costs of duplicate facilities) would not recur.

The $85 million charge comes in addition to a $14 million charge covering merger expenses.

IVillage had $43.7 million in cash at the end of the quarter, down about $19 million for the quarter, largely because of merger expenses.

Time Warner, a loss of $189 million because of merger expenses and a slowdown in the magazine and book businesses.

Those extraordinary costs will also be reduced, however, because current and past merger expenses were found to have been improperly inflated.