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

To: The Phoenix who wrote (13506)	2/13/2000 8:50:00 PM
From: Techplayer	Read Replies (1) \| Respond to of 21876

Gary, Here is an interesting article, especially since you are such a huge gilder fan <g>. investorplace.com Grab Lucent on the Rebound By John P. Dessauer Editor, Investor's World February 11, 2000 Technology giant Lucent Technologies (NYSE: LU) has crashed to earth with recent earnings shortfall announcements. This is your chance to buy the stock, before it goes to $80 and beyond. Here's why: Born four years ago, after the government forced AT&T to split up, Lucent is the evolutionary child of Bell Labs, probably the best technology facility ever created. Lucent has carried on the tradition of excellence and innovation in technology and has created a profitable business enterprise. George Gilder, the leading futuristic thinker on technology and how it will change the economic landscape, is impressed with Lucent's giant fiber optic manufacturing facility in Georgia. In that facility, he saw that Lucent's ALLWave fiber solves technical challenges and allows a quantum increase in transmissions per fiber. Fiber optic is the future. It allows high speed, long distance communication as never before. Fiber optics and the related equipment alone are a good reason to own Lucent now. But there is a lot more to Lucent than fiber optics. Lucent designs, develops and manufactures a wide array of communications systems, both wireless and wired. We have a Lucent phone system in my office. It is a marvel of technology that integrates e-mail, voice mail and remote access. Imagine the systems Lucent provides to bigger businesses and governments. I know you hate calling a business and hearing that automated voice, but this is Lucent technology at work, and it allows you to communicate around the clock. I believe new technology allows people to be more efficient and effective. On December 9, 1999, Lucent's stock was flying high, above $84, at a new record high. Shortly thereafter, management told Wall Street that the quarter was not looking as good as expected. The stock came tumbling down. On January 21, after the market closed, Lucent issued the worst news. Earnings for the first quarter of the new fiscal year were $0.36 a share, a penny below the low end of the revised range and far below the $0.48 earned in the 1998 quarter. For the first time in 15 quarters, Lucent stumbled. The disappointing results were the result of a combination of factors--changes in Saudi Arabia, a major client of Lucent, inability to meet strong demand for new products, and unnecessary expenses. Wall Street really doesn't like the fact that senior sales executives did not issue warnings earlier about a sales shortfall of more than $1 billion in Service Provider Networks. Wall Street is right to be critical. It looks like some senior Lucent people became a little too sure of themselves and temporarily dropped the ball. But this is not uncommon in business. The same thing happened at Ericsson a year ago. Ericsson then made changes and got back on the growth track. This jolt can do the same for Lucent. It probably will take a couple of quarters before all the issues are addressed and earnings grow again. Meanwhile we have a window of opportunity to buy Lucent at a reasonable price. Not that the stock is cheap. Revised earnings for the fiscal year ending in September are $1.37 a share rising to $1.75 next year. However, if George Gilder is right, and he hasn't missed a major paradigm shift yet, Lucent will be a star among technology companies for a long time to come. Gilder says that in the new economy, communications capacity replaces computer power as the driving force of technological advance. That's where Lucent and especially its fiber optics come into play. My advice is to take advantage of the stock's current decline and buy some shares now, and save some cash to buy more Lucent if it should dip below $50 first. Top global investment advisor John Dessauer's investing system has earned more than 1,039% gains over the last 18 years. Visit Investor's World for more information about his award-winning advisory service.

To: The Phoenix who wrote (13506)	2/13/2000 10:10:00 PM
From: Diamond Jim	Respond to of 21876

"and along with that there is little downside risk." OG, that is exactly why I don't sell at this point. it's already down 25 points, why bother? jim

To: The Phoenix who wrote (13506)	2/14/2000 5:52:00 PM
From: Maverick	Respond to of 21876

HQ:LU's microelectronics is worth >>$20/sh,puts LU on Focus List - BUY Announces Acquisition Of Ortel, Focus On Value of Its MicroelectronicsSegment * Lucent announces the acquisition of Ortel Corp, an opto-electronic manufacturer, for $2.95 billion in stock * We believe that Lucent's Microelectronics business represents a hidden value, with a potential valuation greater than $20 per share * Lucent plans to report cash earnings (excluding goodwill) in future quarters, which should help measure it to its comparable companies * Maintaining FY00 and FY01 EPS estimate of $1.35 and $1.90, maintaining FOCUS LIST-BUY rating Yesterday, Lucent Technologies announced the acquisition of Ortel Corp, a manufacturer of optical lasers for CATV networks, for $2.95 billion in stock. Ortel will become part of Lucent''s Microelectronics segment, and should complement Lucent's existing portfolio with its components for Hybrid Fiber Coax (HFC) networks and fiber-optic networks. The acquisition, which should close during the June quarter, will be accounted for as a purchase. For fiscal 2000, the acquisition is expected to be essentially neutral, on a cash earning basis, or $0.08 dilutive when including goodwill. We are maintaining our FY00 and FY01 EPS estimates of $1.35 and $1.90 (we would note that these estimates include approximately $0.08 of goodwill from the company's recent acquisitions and the proposed acquisition of Ortel). We are maintaining our FOCUS LIST-BUY rating Ortel expands Lucent's product portfolio in CATV and fiber optic networks With this acquisition, Lucent enters the 1310 and 1550 transmitter and receiver components for CATV market (General Instrument and Antec are two of Ortel's large customers for these products). This is an increasingly important area given AT&T entrance into the cable market with its acquisition of TCI and pending acquisition of Media one. Ortel also it brings 980nm pumps into the Lucent portfolio (Lucent plans to use these in metro fiber optic networks). Ortel also makes 10Gb/s transmitters and receivers for telecom applications. Lucent's Microelectronics business represents a hidden value, potentially worth more than $20 p/s Lucent's Microelectronics business is a wholly owned, integrated part of Lucent Technologies. Microelectronics business includes both communications components as well as optical components. The Microelectronics segment had CY99 revenues of approximately $4 billion, a growth of 40% year-over-year. This segment should continue to be the fastest growing segment in Lucent (the others being Enterprise and Service Providers). We believe that the comparable companies for this business range from Conexant, on the communications components side, to JDS Uniphase, on the optical component side. We believe that a tracking stock, or a spin-out, of this segment would be a key way to increase shareholder value in the near term. However. Longer- term there are issues to this action both positive and negative. On the positive side, the company, as a separate entity, would be able to potentially get customers that Lucent could not get for competitive reasons. On the negative side, Lucent would loose a core competency of its components. Overall, we believe that a tracking stock, or spin-off would be a positive strategic move and unlock a tremendous amount of hidden value. With this in mind, a conservative valuation for the Microelectronics business would be comparing it to Conexant, which would value this business at approximately $20 per share. When taking into account the optical component of the Microelectronics business, causing us to take a hybrid valuation of Conexant and JDS Uniphase, the valuation of the Microelectronics business could be significantly higher.Shift to cash earnings report in future quarters As a result of the additional goodwill from the acquisition of Ortel, Lucent's goodwill has now achieved a critical mass, as a result, the company will report its earnings on a cash basis, breaking out acquisition-related goodwill. This change will provide better standards by which Lucent can be measured against its comparable companies. Maintaining FY00 and FY01 EPS estimates and FOCUS LIST - BUY We are maintaining our FOCUS LIST-BUY rating on Lucent shares as a result of our belief that the company is extremely well positioned to capitalized on what we believe are incredibly strong fundamentals in the global communications infrastructure market. We are maintaining our FY00 and FY01 EPS estimates of $1.35 and $1.90 (we would note that these estimates include approximately $0.08 of goodwill from the company's recent acquisitions and the proposed acquisition of Ortel).