Lucent Technologies (LU) Message Board

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Technology Stocks : Lucent Technologies (LU)

LU 2.820

0.0%

Nov 7 9:30 AM EST

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To: stock bull who wrote (21686)	1/20/2005 8:44:32 AM
From: Elroy	Read Replies (2) of 21876

Why do you think this is the key sentence? Lucent is currently recognizing a huge, non-cash pension credit and has been for the past 5 quarters at least. This allows them to deduct $ from their expense lines on the income statement, although it is only an accounting issue and not a real cash deduction from their operations. Therefore even though they are reporting nice ~10% operating margins, without this pension credit they would be about breaking even on the income statement. However, they can't fool with the balance sheet using accounting credits, so I think a better way of seeing how LU's operations are going is to watch their net cash balance. In December it went down. That's basically it in a nutshell.

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