To All- SOME THOUGHTS ON RUMOR OF LUCENT TAKING OVER TELLAB'S
First lets look at the last 1997 fiscal years ( they are one¬ off between the 2 cos.) and compare the two companies.
Market capitalization;TLAB=$10 bil.,Lucent=$60 bil.
Current PE ratio; TLAB=40,Lucent=132(way over valued)
Number of employees; TLAB=4000(added 670),Lucent=130,000 (fired 22,000)
Debt per capital ratio; TLAB=.2%,Lucent=44%.
Gross sales; TLAB=1203 mil.,Lucent=27,146 mil.
Net profits; TLAB=263 mil. or 21.9% of sales,Lucent=474 mil. or 1.7% of sales.
Total liabilities; TLAB= 17 mil.,Lucent=20 billion ( that's $20,000,000,000)
Net earnings per employee;TLAB=$65,750, Lucent=$3646.
SUMMARY
For Wall Street Strategies Co. and other rumor promoters to come to the conclusion that this rumor of take over is dueable by Lucent and acceptable by Tellabs is assinine. I strongly suspect that these cos. had other short term profit motives at heart.
Old AT& T HAD A MONOPOLY AND WAS BLOATED, WITH EXCESSIVE PERSONEL, THAT WEREN'T THAT PRODUCTIVE IN TERMS OF NET INCOME PER STAFF. IMHO, Management wasn't sharp, with up and down results in net income by years. Just because Lucent Technologies was cut off, to go it's separate way, doesn't mean that it has thrown off it's inherited problems, and become lean and mean and productive over night. Lucent is bloated with excessive debt and has employees that only produce 5% of the net income produced by Tellab's employees.
IMHO LUCENT CAN NOT AFFORD TO TAKE OVER A CAPITALIZED $10 BILLION TELLAB'S, no matter how envious they are of Tellab's management and personnel results. Excessive hype and poor analysis has propelled Lucent's price to $94, with a unsustainable and uncalled for PE of 132. (S and P 500 PE of about 22)
If you agree with me, then contact the great management team at Tellab's and their board of director's and send them the following message. If there has been a takeover bid for Tellab's by Lucent, no matter at what level of short term profits,REJECT this offer as it would be the fastest way I could think of to screw up a fine Tellab's company, make life difficult for our loyal employees and put the current Tellab's board of directors out of a job.You could send your messages via Tom Scottino (tom.scottino@Tellabs.com) Attention Pres. Mike Birck.
DAVE DICKERSON |
