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

To: Jack Hartmann who wrote (14425)	4/19/2000 10:43:00 AM
From: David Hansen	Respond to of 21876

From: Thom Calandra's StockWatch Fallout: Everybody to get from street Plus: a PE-growth tool for those seeking bargains By Thom Calandra, CBS MarketWatch Last Update: 10:08 AM ET Apr 19, 2000 . . . Nortel, Cisco and Lucent "are all strong companies with growth supported by the expansion of the Internet." Lucent, which sells optical networking equipment and on Wednesday beat Wall Street earnings expectations for its most recent quarter, has a PEG of about 1.35 (or a 31 P/E compared to a year 2001 estimate of 23 percent earnings growth. Cisco and Nortel, "although also down substantially from their peaks," have much higher PEGs, he says. Cisco trades at a PEG of 2.85 (89 P/E compared with 31 percent projected growth rate). Nortel trades at a PEG ratio of 2.67 (56 P/E on 21 percent growth rate). The winner in Gambacorta's book? "We believe that Lucent represents an excellent value vs. its peers," he says. . . .

To: Jack Hartmann who wrote (14425)	4/19/2000 10:45:00 AM
From: telecomguy	Read Replies (2) \| Respond to of 21876

Guys, look at the numbers closer and you will see that almost ALL of their profit increase from last year's Q2 came from; 1) REDUCTION in R&D 2) Increase in non-operating income (whatever they are) So if you look at their Operating Income BEFORE R&D, it was 2.287 billion verus 2.186 billion in 1999. This is only 4.6 % INCREASE in Operating Income. Not much of an improvement. So what I read into this is that aside from huge growth in Optoelectronics division, LU is still continuing to have problems growing their top line and OPERATING income from 1999. Also, another way to look at their revenue growth shows that it is definitely slowing down compare to their growth rates in 1999 and prior; Q1 ending December 31,1998 was around 9.8 billion Q2 endign March 31,2000 was 10.256 billion. So in 15 months, LU has grown their top line revenue by 4.65% which is an annualized rate of 3.72% growth in REVENUE. Am I missing something here or do the LU numbers look better than they actually are according to my quick analysis? Telecomguy For Three Months Ended 03/31/00 03/31/00 (a) 03/31/99 (b) Change (c) Revenues 10,256 10,256 8,783 16.8% Costs 5,939 5,939 4,546 30.6% Gross Margin 4,317 4,317 4,237 1.9% Selling, General and Administrative 2,030 2,030 2,051 (1.0)% Research and Development 1,110 1,099 1,231 (10.7)% Total Operating Expenses 3,140 3,129 3,282 (4.7)% Operating Income 1,177 1,188 955 24.4%