Nortel Networks (NT) Message Board

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Technology Stocks : Nortel Networks (NT)

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To: Jeng Chiu who wrote (1105)	9/30/1998 1:02:00 PM
From: George A. Roberts	Read Replies (1) of 14638

The assumption is large ...what happens when the earnings estimates are slashed in half as the company fails to execute? The estimates are being reduced as we speak so your pe is rising as I type.The PE will become more like 25-30 on reduced expectations if the revenue continues to fall. Cost cutting will only go so far and then it will not be able to offset all the losses in revenue and then your pe ratio gets higher and not because the street is allowing the multiple to expand like with Lucent or Cisco but because NT will not be making earnings. I don't know which will be the case. As a shareholder getting killed of course I like your view but as a pragmatic investor one should consider the alternative as well... George

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