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Technology Stocks : John, Mike & Tom's Wild World of Stocks -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (258)	1/7/2000 4:52:00 PM
From: wlheatmoon	Read Replies (1) \| Respond to of 2850

NT did a very nice job of protecting their shareholders today...got to love that from management. January 7, 2000 Nortel Scrambles to Escape the Lucent Meltdown By KEVIN MAX, NYTimes.com/TheStreet.com, 1:40 p.m. Shares of Nortel Networks bounced up 19 percent Friday after its management scrambled to release a positive financial forecast to counter the turmoil in telecommunications equipment stocks that Lucent Technologies set off late Thursday when it warned of an earnings shortfall . Trying to calm investors who were dumping Nortel's stock in after-hours trading, the Brampton, Ontario-based company said it anticipated its revenues would outpace the market growth rate by about 6 percentage points and that earnings would increase faster than revenue. Nortel also said it was prepared to meet increased demand for its optical fiber networks. Nortel deliberately rushed out its announcement late Thursday, and its haste paid off Friday. By midday, Nortel's stock was up 14 5/8,or 19 percent, to 91 5/8, from the low ithit in after-hours trading Thursday night, when it fell more than 9 percent. "This was a reaction to Lucent and the general state of the market," Jeff Ferry, a company spokesman for Nortel, said. "We were working closely with chief executive John Roth on the timing of the release." After the market had closed Thursday, Lucent said its earnings could fall short of analysts' expectations by as much as a third for its first quarter. Its stock plunged nearly 25 percent in heavy volume in trading on Instinet after hours. Further, Lucent said it could not meet high demand for its optical networking gear. Investors reacted by selling off stocks across the telecommunications group, including Nortel. As a result, Nortel management and public relations moved quickly to allay fears about the company's future. "As the night went on and we came into today, it became increasingly clear that this was a Lucent problem," said Ted Moreau, an analyst at Robert W. Baird who gives Nortel his highest buy rating. He lowered his rating on Lucent to short-term neutral from a buy after the news. "Nortel was very proactive and called us right before the press release. I think they handled it very well. We were going to take the posture that if the market really sold them down, we were going to be buyers." Moreau noted that the late-night selling could have been hastened by the fact that telecommunications equipment stocks climbed sharply in the fourth quarter and some investors were ready to take their profits. Also, Nortel benefited from investors who defected from Lucent but still believe the fundamentals for the telecommunications sector are solid, according to Moreau. "I don't think we would have seen anything coming out of Nortel if it weren't for Lucent's announcement," Moreau said. Lucent's stock, meanwhile, remained under pressure Friday, although it had rebounded 15/16, or 2 percent, to 52 15/6 by midday.