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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (10561)	4/24/2001 10:32:05 PM
From: telecomguy	Respond to of 14638

Kenneth, did you see the Gross Margin of LU? Something like 17% !!! It appears that in their desperation to win deals with inferior products, LU must have gave away their equipment in the first qtr. Schacht HAD to make the numbers grow sequentially (because that was what he had promised Wall St. few months ago) so it appears that they pumped out products at cost with no margin to just barely beat out Q4 2000 revenue numbers. I thought with McGinn gone, LU wouldn't be playing this kind of "make the numbers at any cost" game anymore........but then who knows how desperate they are in terms of keeping their employee morale up, keeping the factories going, running down their huge inventory, and perhaps most important of all, keeping their bankers happy. What is surprising is the reaction of the market -- I think that once the analysts have time to dissect the balance sheet and the margin as well as getting some more detailed info as to WHERE and HOW LU got their revenue, it will become obvious that they are chasing revenue at any cost. Normally I would not be concerned since I do not own any LU but unfortunately when a main competitor is dropping their "pants" like LU is, NT's pricing is also going to come under heavy pressure. Maybe there is just too many equipment vendors chasing too few a customer.....funny how things can change so rapidly!