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Technology Stocks : Lucent Technologies (LU)

LU 2.570

-3.0%

Nov 17 3:59 PM EST

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To: GVTucker who wrote (10765)	10/28/1999 12:35:00 PM
From: GVTucker	Read Replies (2) of 21876

I guess I should elaborate on the key things that I think makes the earnings report 'sloppy.' 1. Tax rate. The tax rate was lower than LU's guidance. If I use the tax rate per previous company guidance, operating earnings come out to $0.29. There goes most of the upside surprise. 2. A/R DSO. This number was way above what we were promised last quarter. And if you back out the factoring of the sale to Saudi Arabia, there was no improvement at all. 3. Sales to corporate customers was flat. This is probably the item that could be thought to be most dependable. Network Systems (i.e. RBOCs) delivered the upside revenue surprise, and this business cannot be depended upon.

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