The "LU will pre-announce" rumor made the appointed rounds this morning - our desk heard it first from Europe. To put it in perspective, there have been "LU will pre-announce rumors for each of the last 8 quarters - you can see it in the historical trading pattern if you don't believe me. Not even the most bearish sell siders are running with this story, and I am extremely confident that it is wrong.
Now TP, as to your friend who now hates Lucent: It really depends on what part of Lucent she worked. Morale ranges from great to horrible - with first half stock performance there to add visceral passion. Now, how is it that I think her LU stock will be a strong performer?
1. NT can fill only a third of the expected demand for optical equipment in 2000. With orders in hand from NTT, BT, Telefonica, DT, TelecomItalia, KPN, Telia, Beijing Telecom Authority, China Unicom, Global Crossing and AT&T, LU will get as much of the remaining business as it can serve. Given very aggressive ordering from Vitesse, AMCC and JDSU, it looks like LU will be able to deliver optical revs of $7B or more for 2000 - a 70% growth rate.
2. Wireless - LU has half the AWE business, half the SprintPCS business and two thirds the Verizon business. That's more than $4B in 2000 from three customers. Add in $1.5B from the Saudis, and attractive contracts in Japan, Australia, Latin America and China - LU will deliver more than $8B in 2000 - a better than 35% growth rate.
3. Carrier data equipment - mostly Ascend - has been growing at an 80% YoY clip. Look for revenues to approach $4B for CY00.
4. Micro-electronics growth has been extraordinary this quarter. Semiconductor sales - growing 35% YoY. Opto-electronics growing 80%. Power Systems growing 20%. Fiber growing 70%. In total - more than $5B in 2000 revenues with 40% growth.
5. Professional services project to over $1b in 2000 sales with 30%+ growth.
What's not to like? |
