The weakness is all PMCS, CISCO.
Add LU to that list in terms of causes for PMCS' weakness. This on LU from a recent WSJ article:
The first-quarter results showed a drop in nearly every measure of the company's health. Revenue fell to $5.84 billion from $8.07 billion. The company posted a loss of $395 million, or 12 cents a share, compared with net income of $1.25 billion, or 38 cents a diluted share, in the year-earlier period. These results are adjusted for the spinoff of Avaya Inc., Basking Ridge, N.J., and exclude discontinued operations. They reflect amortization of goodwill, one-time items and a gain in the current-year quarter of $1.15 billion from Lucent's sale of its power-systems business.
Sales in Lucent's core business dropped 36% from the year-earlier quarter. Gross margin fell 24 percentage points to 22% of revenue. Inventories were up 22%. Sales, general and administrative costs ballooned 49% to $1.77 billion with $340 million of that going into reserves the company keeps in case customers don't pay their bills. Moreover, sales to one of its biggest customers fell 71%. Lucent declined to identify the customer, but analysts said they believe it is AT&T Corp. A spokesman for AT&T, New York, declined to comment. |
