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

To: Dana Adams who wrote (12410)	1/7/2000 8:57:00 PM
From: Resry	Respond to of 21876

My point is that McGinn did not sound like an executive who had things under control. In addition, if these problems have only now been discovered, there is a rockier road ahead. About two years ago there was the same situation with Boeing. The Co-CEO's at the time were all over TV saying that things would be back to normal soon, that the problem was too much demand, etc., etc. The stock still has not gotten back to where it was two years ago. Production problems are not solved overnight. Good management prevents these problems. Lucent is a great company with great products. But if you can't deliver your product, then your product is worthless. Good luck. Resry

To: Dana Adams who wrote (12410)	1/7/2000 8:58:00 PM
From: Steve Warkentin	Respond to of 21876

"What on earth would you buy now if you sold Lucent at these bargain prices......... Cisco? Nortel? Ciena? Tellabs? " well you could buy JDSU or if you already own it as I do, trade in your LU for CNXT (as I did)

To: Dana Adams who wrote (12410)	1/7/2000 9:04:00 PM
From: Maverick	Respond to of 21876

ML Research:2H00 won't be better than originally forcasted. 10% EPS growth Y-Y Excerpts follow. Lucent announced that it expects December quarter revenues and EPS to be below current expectations. The company expects to report revenues of $9.8-9.9 billion and EPS of $0.36-0.39 for the December quarter. We had been expecting revenues of $11.1 billion and EPS of $0.55. ú The cause of the shortfall was partially related to Lucent?s inability to supply sufficient product in several key areas, including optical networking and wireless. Management believes that in general, many of these issues are temporary, and that revenue growth will accelerate in 2H00 as new products are introduced. ú The successful launch of several new products was already included in our original earnings model, and we see little reason to believe that revenue growth for the second half of fiscal 2000 should be better than what we were originally forecasting. Therefore, we are reducing our fiscal 2000 EPS estimate from $1.55 to $1.35, which translates to only 10% EPS growth for this fiscal year. ú With these growth characteristics, we believe that Lucent will trade at a multiple that is at least 20% below the average for the group. We believe the majority of the shortfall came from the Systems for Network Operators business. Management indicated that some service provider customers experienced changes in implementation plans because of difficulty in accessing funding. But we believe that the weakness in this segment can be better attributed to the following factors: 1. A faster than expected shift to 80 channel DWDM optical products and greater than expected demand for OC-192 capability, which resulted in capacity and deployment constraints. We estimate that this contributed about $300-400 million to the revenue shortfall. 2. Lower software revenues as service providers acquire software more evenly throughout the quarter year instead of making large purchases in the December quarter. We estimate that this contributed about $200- 300 million to the revenue shortfall. 3. Shortages in certain components for Lucent?s wireless infrastructure equipment. Overall, wireless infrastructure revenues are expected to be flat in the December quarter after growing nearly 26% in fiscal 1999. We estimate that this contributed about $200- 300 million to the revenue shortfall. We also believe that the company?s Business Communications Systems business was slightly weaker than expected due to some Y2K issues, and that the Microelectronics sales was marginally impacted by a transition from analog to digital modems. Based on the lower revenue levels, a less favorable product mix (smaller percentage of high margin software sales in the quarter) and the manufacturing issues in the optical business, we estimate that gross margins will be 4-5 points below our original expectations. Some of these problems will also impact March 2000 quarter results. The problem is that many of these new products were already assumed in our models, and we currently have no reason to believe that revenue growth for the second half of fiscal 2000 should be better than what we were originally forecasting. Lucent may now focus even more on operating expenses, and despite this significant shortfall, management believes that fiscal 2000 EPS of $1.45-1.50 is still achievable. But given that we believe there is little upside in our revenue estimates, we prefer to take a more cautious approach in our earnings model at this time. Therefore, we are reducing our fiscal 2000 EPS estimate from $1.55 to $1.35, which translates to only 10% EPS growth for this fiscal year. We now expect fiscal 2000 revenues of $43.2 billion versus $38.3 billion, reflecting 13% growth. With these growth characteristics, we believe that Lucent will trade at a multiple that is at least 20% below the average for the group, or 35-40 times calendar 2000 EPS. Based on this, we are lowering our Intermediate term opinion from Accumulate to Neutral.

To: Dana Adams who wrote (12410)	1/7/2000 10:41:00 PM
From: The Phoenix	Respond to of 21876

You crack me up. But thanks for the laugh on Friday evening. OG

To: Dana Adams who wrote (12410)	1/8/2000 11:12:00 AM
From: geekland	Respond to of 21876

What about the analysts who, after additional study in lieu of the recent earnings surprise, publish 12-month price targets of $50 or so? Doesn't that suggest that LU will probably dip into the 40's, meander for awhile and eventually crawl back up (if you're lucky)? In other words, leaving $$$ in LU is spinning your wheels when there are other opportunities. My reasoning regarding the probability of a visit to the 40's: The avalanche of bad press that people will read over the weekend. The number of people who didn't get a chance to sell or hadn't yet decided to sell. The class action lawsuit - a turn of events that some in this thread have characterized as knee-jerk and of no consequence. However, unlike other such lawsuits, the attorneys in this case have a LOT MORE AMMO considering the false posturing shenanigans committed by LU management. And I'm sure there are A LOT of shocked and angry shareholders who would be eager to join such litigation. (ANY LAWYERS OUT THERE? What is the potential exposure for LU in this scenario?) So - IMHO - we shall be visiting the 40's before ascending through the 50's and onwards. COMMENTS?