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Technology Stocks : Lucent Technologies (LU)
LU 2.455-4.1%12:13 PM EST
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To: stewart kagel who wrote (6649)3/17/1999 8:31:00 AM
From: Mr.Fun  Read Replies (2) of 21876
 
LU's 1Q revenue line spooked many large investors who have been on the sidelines waiting for more information. Furthermore, shorts have been sowing the seeds of doubt about the quality of LU earnings based on some shoddy analysis done by an outfit called the Center for Financial Research and Analysis.

Some observations: the seasonality of LU's revs and earnings is changing - in 1998, sales incentives were tied to the fiscal year rather than calendar for the first time - it should have been no surprise that revenues were up big time in Sep. and light in Dec.

Carrier spending is accelerating due to strong user service demand and the pressures of increasing competition. The spending is not just routers and ATM, but fiber, optical systems, communications software, and even voice. Both Qwest and Level3 bought $10s of millions in circuit switched hardware last year and will buy more this year. 82% of US telecom revenues come from voice, 90% worldwide.

LU microelectronics is doing 20% growth right now in a cyclical upturn in non-PC silicon. LU optoelectronics is only slightly smaller than JDS Uniphase, and growing nearly as fast.

2Q earnings are going to be good. Alot of big investors will be surprised. This baby will take off like a rocket.
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