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

To: GVTucker who wrote (10769)	10/28/1999 1:19:00 PM
From: Cynic 2005	Read Replies (1) \| Respond to of 21876

G, I have been reading your notes on LU. I think you present a very balanced view. However, be prepared to be branded as a short seller who is trying to spread false information by some lunatics on this thread. These guys have their heads buried in the sand and their first reaction to a negative take on their shares is to brand the messenger a liar and short seller. Next, if the stocks doesn't respond to their wishes, they go to the length and start writing letters about you to Congess, the president and even God! I think your efforts to educate folks are noble. But I do think you are pissing in the wind!

To: GVTucker who wrote (10769)	10/28/1999 3:25:00 PM
From: Mr.Fun	Read Replies (3) \| Respond to of 21876

Comments on LU quarter: 1. Revenues - Sales were above even the most bullish analysts' expectations. This is the most important number for the quarter. For all of the "sturm und drang" about A/R DSOs and inventory, the real bear case suggested that the build up in these measures portended a drop in revenue growth. Wrong again Mr. Levy. Total sales for the fiscal year were up 20.5%, besting the high end of LU's guidance and easily making up for the light revenues in Q1. 2. Operating Margins - Lower than I would have expected. The company says it is a one-time phenomenon. I don't like it, but margins just aren't as important as they used to be (in investors minds). 3. Tax rate - I really don't see why Mr. Tucker believes coming in with a lower tax rate is "sloppy", or why he wouldn't give them credit for it. Tax rate is a product of careful management planning - one of the "five simultaneous equasions" LU uses to track its progress. It's a little like not giving credit if COGS fell because component costs were lower. 4. A/R DSO - Whether or not LU met its promises depends on whether you use average balance or end of period measures. Of course, I would have liked to have seen them exceed expectations unambiguously. As for converting a $600M receivable from Saudi Arabia that had been uncollected for 9 months into a vendor financing contract with interest payments, I say what took you so long. BTW this is not factoring a receivable - factoring specifically means turning a receivable over to a 3rd party for collections and accepting a % of the nominal value. What LU did with the Saudis was with the agreement of the customer, involved interest payments and was syndicated to a bank at full nominal value. Nonetheless, I would expect further improvement next quarter. In summary - minor league negative, not a big deal as long as the top line continues to come in. 5. BCS - Sales were flat YoY vs. a tough compare. No one should have been surprised about this. Every sell sider called this one. I do not understand Mr. Tucker's comment about BCS being dependable and Network Systems not being dependable. I would have put exactly the other way. I would like to see LU divest itself of Systimax and anyother part of BCS that is not pulling its weight. 6. Sales to Network Operators - Astoundingly strong - 32% growth. Strong domestic and strong overseas. Strong in voice, strong in data. Strong in wireless, strong in optical. 7. Recent trading - There was a little profit taking yesterday - also, NT's stunning 300bp increase in 2000 sales growth guidance took a little wind from the sails (N.B. I like NT, however, I think the recent love fest is a little over done, but I'll comment on that at a later date) The Nov. 11 analyst conference is coming. I believe this means contract announcements and new products. There is a real shift toward optimism amongst the sell side, and I expect this to be one of the best stocks on the board for the next 6-12 months.