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Technology Stocks : Lucent Technologies (LU)
LU 2.665+3.5%Jan 21 3:59 PM EST
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To: Kenneth E. Phillipps who wrote (14758)5/14/2000 7:07:00 PM
From: Mr.Fun  Read Replies (3) of 21876
 
Ken,

I do not want you to perceive this as NT bashing - MM can tell you we have bought a lot in the last few weeks. However, your assertions require some response:

1. NT is suggesting that it WILL grow its enterprise business in 2h00, but it has been shrinking for 5 quarters vs. easy compares if you adjust for the purchase of Bay and the reconsolidation of European joint ventures. There is no way to spin it positively for NT - after the Bay acquisition, the entire enterprise group was paralyzed by channel conflicts. If you remember, NT sold its enterprise distribution to WilTel in 1997, then acquired Bay and its direct/2-tier channel mess. They are still sorting this out.

2. NT has indeed dominated the 10G market for the past 5 quarters. However, its growth is gated by capacity constraints, leaving plenty of room for LU to get in the game in a big way. Inside scuttlebut is that LU's 10G products are being favorably received by an attractive list of 1st tier carriers. I just heard yesterday that Sprint was really impressed and could be a customer this year. Of course you are correct when you say only time will tell.

3. Let's be real. NT had a great quarter, but its growth was not as good as Cisco. 46% NT topline growth should be adjusted down 5.3% to account for the consolidation of JVs. So a quarter of 41% growth vs. an extremely easy compare. Cisco put up 55% YoY vs. an extremely difficult compare. Of couse, NOK put up 73% vs. an equally difficult compare, and is valued at a multiple lower than NT.
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