With news like this is really really hard to say if it's good for Ciena or not. To me there are two interpretations.
1> Earning in the Telecom sector is growing strong. And This sector is totally stronger than expected....
Obviously this is the positive side...
2> Lucent is so strong in their marketing efforts and strong in their technological advancements, they are eating all CIEN & Nortel's market share...
Which one do you guys think the market will look at the earning from LU????
Ed
Thursday October 22 3:28 PM EDT
Lucent's Q4 Results Beat Expectations
By Jessica Hall
NEW YORK (Reuters) - Lucent Technologies Inc. (LU - news) Thursday reported better-than-expected fourth-quarter profits and a 16 percent rise in revenues due
to gains in market share and strong growth in sales of communications equipment to phone companies and large businesses.
Lucent, the Murray Hill, N.J.-based telecommunications equipment giant, has topped Wall Street's earnings expectations every quarter since it was spun off
from AT&T Corp. (T - news) in 1996.
Separately, Lucent said it landed a $2 billion contract to provide equipment to WinStar Communications Inc. and ended its money-losing consumer phone joint
venture with Holland's Philips Electronics NV (PHG - news).
Lucent posted fiscal fourth-quarter earnings of $388 million, or 29 cents a share, including some one-time items. A year ago, Lucent posted a loss of $597
million, or 47 cents a share, including one-time acquisition-related charges.
Excluding the acquisition-related charges, fourth-quarter net income increased 49 percent to $548 million, or 41 cents a share.
The results beat Wall Street expectations of 39 cents a share and year-earlier profit of $369 million, or 28 cents a share, which also excluded acquisition-related
charges.
The gains in fourth-quarter net income were driven by strong revenue growth, higher gross margins and a decrease in the company's effective tax rate, Lucent
said.
Lucent stock fell slightly, down $6 cents to $78.94 in composite New York Stock Exchange trading, as the fourth-quarter results were in line with the company's
recent optimistic forecasts, analysts said.
''The company has been telling people ever since its analysts meeting in September to expect a good quarter... and all of that was built into the stock price,''
Mary Henry, a telecommunications equipment analyst with Goldman Sachs, said.
''It was a good strong quarter all around. The top and bottom were both very strong,'' Henry said.
Other analysts said Lucent's stock eased since some investors had expected Lucent to beat the consensus earnings expectations by an even greater extent.
Fourth-quarter revenues increased 16 percent to $8 billion from $6.9 billion a year earlier. Lucent noted its revenues for continuing operations, which
excludes results from businesses it sold and includes sales from recently acquired units, increased 23 percent.
The strong quarterly results and market share gains ran counter to recent earnings warnings from competitors such as Canada's Northern Telecom Ltd (NT -
news)., France's Alcatel and Ciena Corp. (CIEN - news).
''Lucent had a very solid quarter, and we are continuing to see strong demand across all of our businesses from both traditional and new customers,'' Lucent
Chairman Richard McGinn said.
''A lot of Lucent's strength comes from being able to provide a whole system'' or complete communications network and support systems instead of just
piecemeal equipment, said Raj Srikanth, a telecommunications equipment analyst with FAC Equities.
''They have an intense focus on new technologies, and management has done well taking the taking the power of (research arm) Bell Labs and converting it into
commercial products,'' Srikanth said.
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