Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: Herb Duncan who wrote (2721)	11/1/2000 7:01:25 PM
From: zbyslaw owczarczyk	Respond to of 3891

Fool Plate Special: Alcatel Halts Fiber Fall By Tom Jacobs Paris-based telecom and fiber optic networking equipment maker Alcatel (NYSE: ALA - news) posted excellent third-quarter results yesterday. The stock beamed up 9% from $57.13 to $62.38 yesterday on news that net income tripled, operating profit doubled, and revenue was up 50% over the same period last year. Alcatel's good news countered the fiber optic sell off that began last week when Nortel's revenues jumped "only" 90%. These numbers confirm CEO Serge Tchuruk's successful strategy to push Alcatel into markets driven by demand for Internet traffic, and more good news apparently lies ahead. CFO Jean-Pierre Halbron forecast full-year 2000 earnings growth in the high 30s, up from an earlier 35% estimate. According to Bloomberg, Halbron stated in the earnings conference call that "We like making forecasts and beating them," sales will rise "at least" 25% next year, and operating profit will double again. Newbridge and now 360networks CEO Tchuruk began to reposition Alcatel in 1998 after it missed analysts' earnings estimates. He foresaw Internet traffic growth -- now estimated to double every year for the next four years -- and pushed into optical components, high-speed transmission products and undersea phone networks. To do it, Alcatel snapped up $16 billion in acquisitions, including Canadian Newbridge Networks for $7.1 billion. Newbridge's switches for voice, data, and video on a single network are helping Alcatel catch up to leaders Lucent (NYSE: LU - news) and Nortel (NYSE: NT - news). (If you want to learn more about fiber optic equipment making, it's worth considering the Fool's recent Internet Report, for a small price.) Alcatel announced its latest deal today. It will gulp a $1 billion piece of Vancouver-based 360networks (Nasdaq: TSIX - news), buying $700 million in preferred stock now and $300 million in stock by 2012. 360networks commits to purchase $1.2 billion in Alcatel optical networking equipment for a U.S.-Canada-Japan undersea network. Alcatel will invest another $300 million if 360networks uses Alcatel equipment for a transatlantic network. Where to? Alcatel increasingly focuses on its core telecommunications business. CEO Tchuruk has moved to float tracking stock in the Alcatel Optronics (Nasdaq: ALAO - news) division, which contains part of Alcatel's optical networking operation. Tchuruk plans next year to spin off Nexans, its energy cables division. Analysts estimate that a separately traded Nexans would be the world's third-largest energy cables company after Italy's Pirelli and Sumitomo Electric of Japan. Selling at an estimated 2000 P/E of 46, Alcatel is a bargain compared to other premium-valued fiber optic networking companies: P/E earnings estimate to date Avanex (Nasdaq: AVNX - news) 416 6/01 Corning (NYSE: GLW - news) 68 12/00 JDS Uniphase (Nasdaq: JDSU - news) 115 6/01 Nortel (NYSE: NT - news) 61 12/00 Alcatel does command a slightly higher multiple than recently sacked Lucent (P/E 40). But hey, the French company's executing on all fronts and has a brighter outlook. Sacré bleu! For more things Foolish, go to the The Motley Fool's complete site! We aim to inform, educate and help you make good money, Fool. Also, check out the FoolMart, the place to shop for Foolish investing tools. Become a Fool for Motley Fool stock features, updates, contests, and product discounts!