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Technology Stocks : MONI - Marconi Nasdaq ADR -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (76)	7/4/2001 5:58:30 AM
From: ms.smartest.person	Read Replies (2) \| Respond to of 129

Marconi macaroni Marconi to issue trading statement, Warning expected, share suspended By Peter Bale, FTMarketWatch 10:40:00 AM BST Jul 4, 2001 LONDON (FTMW) -- Marconi [UK:MONI] [US:MONI] had its shares suspended on Wednesday pending a board meeting and statement on current trading, against the background of expectations the company will warn on profits. "It looks like bad news," said David Lis, a fund manager at Morley Fund Management, one of Marconi's largest shareholders. Marconi, which has been expected to follow others in its industry and issue a profit warning, said it requested the suspension to ensure all investors were fully informed. "It's unusual to suspend the shares. It would lead you to think the worst," Lis told FTMarketWatch. Tin hat time Even Marconi's house broker CSFB downgraded its outlook for the company by 25 percent last month, yet the company has been silent. See story on recent cuts in Marconi ratings. "I've got my tin hat on," said one analyst, who declined to be named, but said he was expecting bad news from Marconi. "It is actually almost getting to the point in the shareprice where the key thing is just to survive the next 12 months." Most of its rivals in the telecoms equipment and optical fibre industries have reported a worsening outlook and Marconi is particularly exposed to the weakening market in the United States. The company has been heavily criticized by some shareholders for not making clear earlier what its trading position was. "Their last statement said this year would be better than last year and that's frankly laughable. It's become untenable as events have unfolded," said the analyst. Marconi shares closed on Tuesday at 245 pence, down 7 percent. That compares with a 52-week high of £12.76 and is just off the year low of 225 pence as concern at Marconi's prospects has grown. The likelihood of a Marconi warning knocked related shares across the sector: Bookham [UK:BHM] [US:BKHM], for which Marconi is a big customer, fell 6 percent to 190 pence and telecoms testing equipment maker Spirent [UK:SPT] fell 10 percent to 198.50 pence. Separately, Marconi said it had sold its medical systems division to Philips Electronics [NL:PHIA] [US:PHG] for $1.1 billion. See more on Marconi medical systems sale. Lis said investors would be disappointed at the amount raised with the sale of the medical division. Some had expected it to fetch around one times annual sales but it had been sold for 0.7 times. "It's a buyer's market," he said. The analyst said the sale to Philips looked like a fire sale which would cut £50-60 million of badly needed profit from Marconi, though it would help the company's cash position. Marconi had already announced a major restructuring to cut back on its own manufacturing operations, farming them out to others, and the suspension of the shares suggested an even bigger shakeup. Waiting for word Lis has been a long-term holder of Marconi and a critic of its disclosure policy. He said he remained a holder. The company has repeatedly said it had no intention of making any statement before its July 18 annual general meeting and doesn't report on a quarterly basis like most of its U.S. rivals. Go deeper News Alerts MarketPulse News Stories Europe US Global News by Email "There's nothing we can do at the moment so we just have to wait and see what they have to say," he said. Asked if he still had confidence in the firm, he said: "It still seems hard to believe that they have managed to destroy this much value but they have been caught by an unprecedented decline in the industry." See Marconi suspension statement on FTMarketWatch real-time RNS. See FTMarketWatch commentary on likelihood of Marconi warning. See recent Vince Heaney Chart of the Day on Marconi. See analysis on earings outlook for European companies. Peter Bale is editor-in-chief of FTMarketWatch.com in London ftmarketwatch.com{89CE6DC5-EF8A-4F03-B19A-843BDA6E458C}