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Technology Stocks : Lucent Technologies (LU) -- Ignore unavailable to you. Want to Upgrade?

To: MMW who wrote (10068)	10/16/1999 9:56:00 AM
From: The Phoenix	Read Replies (3) \| Respond to of 21876

I don't recall which discussion you are referring to but I do beleive that LU is still a good long term buy. They will benefit from build out of next generation networks but they have their hands full. In the end there is plenty of business for LU, NT, and CSCO and all should do quite well over the next 5 or more years. Remember - we haven't yet scratched the surface internationally. China, India, Mid-East, Indonesia, - even Russia have lots more infrastructure to lay just to get into the game. OG

To: MMW who wrote (10068)	10/17/1999 12:37:00 AM
From: Bindusagar Reddy	Read Replies (1) \| Respond to of 21876

15-Oct-99 Bernstein (Paul Sagawa }LU: NEW PRODUCTS TO EXTEND LEADERSHIP IN CARRIER DATA Stock Rating Price YTD Perf 1998 1999E 2000E 1999(x)2000(x) ------------------------------------------------------------------------------- LU(Sept) O $62 16% $0.86 $1.24 $1.61 48.5 37.1 S&P 500 $1,283 7% $44.05 $49.00 $52.50 26.8 25.0 O - Outperform, M - Marketperform, U - Underperform Highlights * Lucent is the #1 provider of carrier class data networking equipment with sales of approximately $2.5B in FY 99 growing more than 50% YoY. Strong new products in core IP, ATM, and multi-service access will sustain Lucent's strong momentum. Moreover, LU will gain further advantage by integrating these technologies with its leading optical and wireless infrastructure solutions. This is a key factor driving our expectations of 20% top-line growth and above consensus earnings ($1.61 in FY00 vs. $1.51). We rate Lucent outperform with a target of $100. * Lucent's Nexabit core IP router is much further along than we had suspected. The hardware design, scaleable to 6.4 Tbps, more than a 100 times faster than offerings from Cisco or Juniper, features numerous breakthrough innovations that will leapfrog even the next generation competitive offerings. The software is undergoing a tortuous final testing process to eliminate even the smallest incompatibility with Cisco's dominant BGP implementation. Within 6-9 months, we believe LU will be the first to deliver a completely compatible terabit class Internet router. * Lucent's ATM business continues to exceed even aggressive expectations with triple digit YOY growth. LU now has nearly 70% of the core ATM market including a new but unannounced order from Deutsche Telecom for hundreds of GX550s to support its rollout of xDSL services. We expect LU to introduce a new 360 Gbps OC-192 capable switch in 12-15 months, while adding IP hardware to its ATM products in the same time frame. * Lucent's new Pathstar product is finding an enthusiastic market. Combining multi-service access, hi-speed IP routing and class 5 telephony, the Pathstar is a CLEC in a single compact box. We believe sales of this product will exceed $600 million in 2000 - more than 3x original estimates - and topping $1.2B in 2001. * All of Lucent's new core data products will be tightly integrated with its optical portfolio, a significant advantage vs. rivals like Cisco, Juniper, and Newbridge, which lack mature optical product lines. * We believe Lucent's strength in data networking will give it considerable advantages in 3G data capable wireless equipment. Key infrastructure players Ericsson and Nokia have never built a carrier class data network outside of the laboratory, raising considerable risk of incompatibilities and delays. Lucent can point to its leadership in CDMA (the radio technology of 3G), and ATM, as well as the aforementioned development in IP. * Research Conclusions Lucent is uniquely positioned in carrier data, commanding 36% share of the rapidly growing $7.5B market (we expect overall market growth of greater than 40% CAGR over the next 3 years). We believe that LU will maintain its momentum in carrier data bolstered, in part, by triple digit growth in the company's ATM business. Our long-term positive outlook is also based on the speed, scalability, and rapid development of the Nexabit terabit IP router as well as the growing demand for Lucent's new Pathstar product. Additionally, we believe that Lucent will be able to leverage its technology leadership in optical networking by tightly integrating its core data products to sustain competitive advantage over data networking rivals. Finally, Lucent's experience in data networking, combined with its leadership in CDMA technology, should also position the company for large share gains as carriers begin to deploy their third generation wireless networks. We believe that the positive developments in Lucent's carrier data business, coupled with its strong positions in switching, optical networking, and communications software will enable the company to maintain its dominance in the overall carrier class market. Furthermore, we expect Lucent's strength in the carrier class market to significantly contribute to above consensus overall sales growth (20%+) and EPS ($1.61 in FY00 vs. $1.51 consensus) in FY00. We rate Lucent outperform with a target of $100.