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

To: Dana Adams who wrote (12414)	1/7/2000 9:22:00 PM
From: bgg	Read Replies (3) \| Respond to of 21876

Yeah Dana, except that many believe the receivables issue is a big, big issue. You may want to stand back and take a more "real" look at things, and make sure YOU know what is going on. Otherwise, you may be the one that will get your "meager worth" taken away ... ooops, I guess that was already in process bigtime today... I think this analyst comment on LU sums up the seriousness of the receivables issue that Chuzz was very smart in picking up and highlighting/harping. I've also included commentary from Paine Webber, which hits the other macro issue here ... product transitions and erosion of traditional business. Comments from McDonald Investment: "Lucent's underlying financial metrics have been deteriorating for some time. Accounts receivable days sales outstanding (DSOs) have been elevated for a number of quarters, and this is an indication that the company has had to push at quarter end to meet aggressive revenue expectations. Last quarter (September), gross margin fell by over 200 basis points sequentially, which could be a sign of aggressive discounting employed to the same end. The Company's 10K for fiscal 1999 (ended September) disclosed that backlog fell from over $10 billion to under $7 billion over the course of the year, and while some of this decline is certainly attributable to an absence of large deals, when viewed in the context of some of these other factors it raises questions about burning backlog to meet expectations. In short, there have been signs for some time that Lucent has been pushing to meet aggressive revenue and earnings objectives, and the company may simply have run out of opportunities to bring in business at the end of the quarter." LU Commentary from Paine Webber: "While execution was the central issue in the miss, there was evidence that Lucent's legacy products are beginning to fade. Core switching port growth was flat after posting 30% port growth and double-digit revenue growth last year. Although Nortel, Cisco and others have already made this proclamation, the central office switch is entering its final cycle. PBX sales, which have shown poor growth for some time now, also appear to be entering the final cycle as IP telephony in the Enterprise becomes a closer reality. While we knew these elements of Lucent's business would ultimately disappear, their deterioration made the execution miscues in optical and order management significantly more apparent." Respectfully, (doesn't sound so sincere when there's a personal slam or two in the message, does it?) bgg