Al, I'm still riding this CMVT rocket too.
;-)
Telecom equipment makers' shares rise on Lucent news
biz.yahoo.com
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Friday January 7, 5:47 pm Eastern Time
Telecom equipment makers' shares rise on Lucent news
NEW YORK, Jan 7 (Reuters) - Investors who were shocked by Lucent Technologies Inc.'s (NYSE:LU - news) earnings warning wasted no time on Friday buying shares of its competitors that they perceived were poised to benefit from Lucent's stumble.
They drove the shares of other telecommunications equipment providers sharply higher, as they decided that Lucent's troubles were particular to their company, and not to the industry.
Telecommunications equipment maker Ciena Corp. (NasdaqNM:CIEN - news) gained 26 percent to close up 11-7/8 at 57-3/4. Nortel Networks Corp. (Toronto:NT.TO - news) (NYSE:NT - news) ended the day up over 14 percent, closing up 12-3/16 at 97-7/16.
``I think the investment community is assuming that Lucent's problem may be Ciena's advantage,' Kevin Slocum, analyst with SoundView Technology Group, said.
Nortel is a leader in the fiber optic networking market, which is one of the areas in which lucent suffered manufacturing constraints. Analysts believe that companies such as Ciena and Nortel will benefit as customers turn to them after being frustrated by Lucent's problems.
Friday's gains helped shares of Ciena to recover some of their lost ground since hitting a 52-week high of 74-9/16 on Dec. 13.
Thursday after the market close, Lucent, the world's largest telecommunications equipment maker, said it expects earnings for the quarter ended Dec. 31 to range between 36 cents to 39 cents a share, compared with 48 cents a share a year earlier.
Analysts surveyed by research firm First Call/Thomson Financial expected Lucent to earn 54 cents a share.
The news erased one-fifth of Lucent's market capitalization and set a record for New York Stock Exchange trading volume as the 136 million shares traded topped the 1988 record set in Occidental Petroleum.
Nortel shares, which closed up 12-3/16 at 97-7/16 in trade on the New York Stock Exchange, benefited from Lucent's troubles as said its earnings outlook had not changed.
The Brampton, Ontario-based Nortel said late Thursday that it was ``very' comfortable with its prior guidance on 1999 and 2000 financial results.
Nortel said it expects to post 1999 revenues between $21.5 billion and $22 billion versus $17.58 billion in 1998. Net earnings per share are expected to be up about 20 percent, Nortel said. It will report earnings on Jan. 25 after the market close.
Other companies that compete with Lucent in supplying DWDM (dense wave division multiplexing) products also saw their shares rise.
JDS Uniphase Corp. (NasdaqNM:JDSU - news) rose 30-3/16 to close at 79-15/16; SDL Inc.'s (NasdaqNM:SDLI - news), shares rose 43-15/16 to close at 216-1/4; and E-TEK Dynamics Inc. (NasdaqNM:ETEK - news) shares rose 25-1/4 to close at 124-15/16. All trade on the Nasdaq stock market.
Shares of data networking leader Cisco Systems Inc. (NasdaqNM:CSCO - news) ended 5-7/8 higher at 105-7/8.
Cisco is a leader in the data networking market, an area that Lucent has only aggressively addressed in the past 18 months. Late Thursday, Cisco echoed Lucent's comments about incredibly strong demand.
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