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To: Boplicity who wrote (1976)	11/12/1999 1:19:00 AM
From: LBstocks	Respond to of 24042

SSB report on LU includes comments on WaveStar (note there is no commercial availability until 12/2000)> LU: Analyst Meeting Should Be Upbeat; Focus On Product Momentum Salomon Smith Barney Thursday, November 11, 1999 -------------------------------------------------------------------------------- --SUMMARY:--Lucent Technologies, Inc.--Telecommunications Equipment * We expect LU's 4th annual analyst day to be upbeat * Focus will be on product momentum as Lucent announced $12.5 bn in new contracts including 96 new customers in fiscal 1999. * New product focus should include its Softswitch, WaveStar LambdaRouter, and NX64000. * LU's softswitch and NX64000 have already yielded close to $1 bn in contract announcements since June. * We believe the company will reiterate its goal of a 300-500 basis point gain in market share. --EARNINGS PER SHARE-------------------------------------------------------- FYE 1 Qtr 2 Qtr 3 Qtr 4 Qtr Year Actual 09/99 EPS $0.49A $0.17A $0.26A $0.31A $1.22A Previous 09/00 EPS $0.55E $0.25E $0.34E $0.41E $1.55E Current 09/00 EPS $0.55E $0.25E $0.34E $0.41E $1.55E Previous 09/01 EPS $N/A $N/A $N/A $N/A $1.90E Current 09/01 EPS $N/A $N/A $N/A $N/A $1.90E Previous 09/02 EPS $N/A $N/A $N/A $N/A $N/A Current 09/02 EPS $N/A $N/A $N/A $N/A $N/A Footnotes: --FUNDAMENTALS-------------------------------------------------------------- Current Rank........:1M Prior:No Change Price (11/9/99).....:$73.25 P/E Ratio 09/00.....:47.3x Target Price..:$100.00 Prior:No Change P/E Ratio 09/01.....:38.6x Proj.5yr EPS Grth...:24.8% Return on Eqty 99...:36.0% Book Value/Shr(00)..:5.86 LT Debt-to-Capital(a)21.9% Dividend(00)........:$.08 Revenue (00)........:45060.00mil Yield...............:0.1% Shares Outstanding..:3172.0mil Convertible.........:No Mkt. Capitalization.:232349.0mil Hedge Clause(s).....:# Comments............:(a) Data as of the most recently reported quarter. Comments............: --OPINION:------------------------------------------------------------------ All day today Lucent will hold its 4th annual Analyst Day at its Murray Hill, NJ headquarters. As it has been in the past, we expect today's meeting to be upbeat. We believe today's focus will be on continued product momentum as Lucent generated $12.5 billion in contract wins including 96 new customers in fiscal 1999. We also believe focus will be on its new product line-up, which includes its Softswitch, WaveStar LambdaRouter and NX64000. Since June, Lucent has announced close to $1 billion in contracts for its new products (softswitch and NX64000) from customers including Level 3, PSINet and Global Crossing. Based on continued product momentum and its new product line-up we believe Lucent will reiterate its goal of a 300 to 500 basis point gain in market share. OVERVIEW OF NEW PRODUCTS The company's SoftSwitch is a software switch developed for IP networks that combines the best of packet-based and circuit-based worlds. The softswitch meets the reliability requirements of today's voice networks as well as needs of data networks in the future. Also, the softswitch includes all the traditional voice services such as one-plus dialing, local number portability, 411, 911, etc... which generate significant revenues for carriers. Lucent announced contracts for its softswitch from Level 3 as well as PSINet and in October announced plans to jointly develop and market the softswitch with NTT Comware for the Japanese market. The NX64000 is a carrier class switch/router that supports interfaces from DS3 (45 Mbps) to OC-192 (10 Gbps) and has a switching capacity of 6.4 terabits. The NX64000 is scheduled to be available by the end of 1999. Within the last two weeks Lucent has announced contracts for the NX64000 from Global Crossing as well as PSINet. The WaveStar LambdaRouter is a high-capacity, all-optical router. The LambdaRouter is able to route optical signals from fiber to fiber without the need to first convert these signals to electrical form, which is how all traffic is currently switched/routed today. Lucent believes this product will offer operators cost-savings of up to 25%. This product, which was first announced at Telecom Geneva, will be available to select customers for trial in July 2000 with commercial availability scheduled for December 2000.