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Technology Stocks : Lucent Technologies (LU)
LU 2.570-3.0%3:59 PM EST
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To: Mr.Fun who wrote (10778)10/28/1999 3:40:00 PM
From: GVTucker  Read Replies (1) of 21876
 
Mr. Fun: I really don't see why Mr. Tucker believes coming in with a lower tax rate is "sloppy", or why he wouldn't give them credit for it. Tax rate is a product of careful management planning - one of the "five simultaneous equasions" LU uses to track its progress. It's a little like not giving credit if COGS fell because component costs were lower.

No, it isn't. The tax rate is easily manipulated quarter to quarter. COGS is not. Long term tax rate is indeed the product of careful management planning, but one quarter is not even close to long term enough. Given a choice of lower tax rate and worse gross margins, or higher tax rate and better gross margins, which would you choose?

Whether or not LU met its promises depends on whether you use average balance or end of period measures

No. Using ending balance, DSO decreased from 93 days to 91 days. Using average balance (as I do) DSO decreased 5 days to 87 days. Nobody out there had an estimate as high as 87 days.

BTW this is not factoring a receivable - factoring specifically means turning a receivable over to a 3rd party for collections and accepting a % of the nominal value. What LU did with the Saudis was with the agreement of the customer, involved interest payments and was syndicated to a bank at full nominal value.

Those two sound the same to me, only the semantics are different.
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