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Technology Stocks : Lucent Technologies (LU)

LU 2.650

-2.9%

Nov 14 9:30 AM EST

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To: puborectalis who wrote (8855)	7/26/1999 6:38:00 PM
From: Chuzzlewit	Read Replies (5) of 21876

Stephen, There may be a problem. I am a LU shareholder (in at the beginning), and I have watched an erosion of cash flow over the past several quarters. I find this quite disturbing. Just consider these numbers: Accounts receivable increased by 28.1% and inventories increased by 57.9% over the last 9 months, but sales increased by only 19.4% over the same period. And receivables ballooned an additional $730MM from last quarter (about a 10% increase) while inventories jumped $840 MM (about 20% from last quarter). We are witnessing disproportionately high buildups in balance sheet items which speak to poor operating efficiencies. This laxity is causing a mediocre ROIC and perhaps a continuing reliance on additional debt as the company grows. Perhaps the market is taking note of these problems. I wish LU management would clean up its act in this regard. TTFN, CTC

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