Lucent may be on sale but, I suspect, they may think they should not be.
<<<Monday October 5, 3:10 pm Eastern Time
Lucent reiterates bullish outlook
NEW YORK, Oct 5 (Reuters) - Lucent Technologies Inc. on Monday reiterated that it is
comfortable with current Wall Street earnings estimates as it gains market share and grows
faster than its competitors.
''We are not uncomfortable with earnings estimates,'' Lucent chairman Richard McGinn said
at the Wall Street Journal Technology Summit.
Analysts expect the Murray Hill, N.J.-based telecommunications equipment company to earn $1.70 a share compared to
$1.17 a share a year ago, according to First Call.
''We are growing faster than most ... and we are not giving away margin dollars to do that,'' McGinn said.
Lucent's optimistic outlook counters the recent earnings and revenue warnings seen from competitors such as Canada's
Northern Telecom Ltd. (Toronto:NTL.TO - news), France's Alcatel (NYSE:ALA - news) and CIENA Corp. (Nasdaq:CIEN
- news).
But McGinn said it is not impossible for Lucent to be optimistic while its competitors are seeing a slowdown.
''It is not an unreal picture for both,'' McGinn said.
''Every time we make a new sale outside the U.S., it is market share gained at the expense of others,'' he said.
McGinn also said he expects the trend of consolidation in the telecommunications equipment industry to continue but he did not
comment specifically on any merger or acquisition plans Lucent may have.
''You will see continued consolidation at the high end,'' as large equipment companies join forces to provide the wide array of
services its customers seek. As telecommunications services companies merge, the equipment companies that serve them will
merge to be able to handle the increasing demands.
''If you're not fleet of foot, you will become prey,'' McGinn said.
Mid-sized firms and smaller firms will be acquired as larger companies buy up expertise they need and smaller companies join
together to create greater strength, he said.
While the industry consolidates, new companies will emerge, offering new technologies and new expertise, he said.
Lucent is widely expected to seek a major, multibillion acquisition to bolster its presence in the data networking market now
that it is free from a two-year restriction against certain merger accounting techniques that would have unraveled its favorable
tax-free spin-off from AT&T Corp. in 1996.
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