A long time ago we talked about LU....I was tempted to buy when it pulled back into the 20's, and you said there may be more bad news to come, that it was a poorly managed company. Well, now it's six and a half bucks a share, and there are rumblings that they are recovering, or at least deteriorating less rapidly than Nortel (which probably isn't saying much).
Is it worth plugging my nose and taking the plunge?
dailynews.yahoo.com
Tuesday August 21 3:35 PM ET
Lucent Regains Lead From Nortel in Gear
By Ian Karleff
TORONTO (Reuters) - Lucent Technologies Inc. (NYSE:LU - news) regained the title as the world's largest supplier of optical telecommunications equipment in the second-quarter, vaulting ahead of arch-rival Nortel Networks Corp. (NYSE:NT - news) (NT.TO), according to a recent Dell'Oro report.
Lucent captured a 21.1 percent share of the $4 billion global market for optical equipment in the quarter ended June 30. Nortel fell to second place with a 16 percent share, while Alcatel (CGEP.PA) came in third at 15 percent, according to telecoms research firm.
The rankings compare with first-quarter market share figures that saw Lucent at 15 percent and Nortel with 29 percent.
Shares of Nortel dipped to a record low on Tuesday, down 16 cents at $6.45 in New York, while shares of Lucent were up 16 cents at $6.61. In Toronto, Nortel shares dropped 36 Canadian cents to touch a 52-week low of C$9.84
Optical gear, which can move telecommunications traffic in high volumes and at high speed, was a key growth driver for Nortel in 2000. About one-third of Nortel's 2000 revenue was derived from optical equipment or $10 billion of a total $30.3 billion in sales.
Nortel boasted of a 43 percent share of the global market for optical equipment in 2000, and said on Tuesday in response to the report that its declining share in the most recent quarter is the result of the timing of customer purchases.
Shin Umeda, a researcher at Dell'Oro, said the slide in Nortel's positioning is largely a factor of them taking back gear from financially unstable customers in the quarter. Also, Lucent has improved its product line and is beginning to ``gain a bit of traction''.
Overall, the market for optical equipment has shrunk by one-third from $6 billion in the second-quarter of 2000, with many customers curtailing purchases because their networks are able to handle current traffic flows.
``The market as a whole has contracted in size. Consequently any particular slowdown in purchasing by any one customer has a more significant impact than it might have in previous years,'' said Peter Evans, Nortel's vice-president of metro optical marketing.
Evans said the networks that buy optical equipment from Nortel have only now begun to reach capacity, whereas networks that buy from its competitors were still demanding product in the second-quarter.
``A lot of it is at what point do networks fill up to completion. We have networks that are only now starting to look at their next wave of purchases,'' added Evans.
Nortel reported a massive loss of $19.2 billion in the second quarter due to the writedown of investments and inventory, and charges related to the slashing of its work force and the shuttering of offices and plants. Revenues fell 39 percent in the quarter, due in part to a 78 percent year over year decline in optical equipment sales.
Despite the malaise that has descended on telecom equipment makers in 2001, brought about by a slowdown in capital spending by network carriers and the bursting of the Internet bubble, Dell'Oro still expects global optical sales to grow to $57.3 billion in 2005. |
