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Strategies & Market Trends : Paint The Table -- Ignore unavailable to you. Want to Upgrade?

To: Jorj X Mckie who wrote (19274)	3/13/2002 1:56:25 AM
From: Lost1	Read Replies (1) \| Respond to of 23786

not to fear Jorj....slappy days are here again Lucent, Nokia Shares Drop on Warnings Tue Mar 12, 9:02 PM ET NEW YORK (Reuters) - The battered telecom sector took another hit on Tuesday as a fresh bout of earnings warnings from giants Lucent Technologies Inc. and Nokia (news - web sites) Corp. soured investor hopes for a recovery any time soon. And once again, accounting issues clouded the air after WorldCom Inc. , the No. 2 long distance phone company, and Qwest Communications International Inc. , the No. 4 local phone provider, said they were being investigated by securities regulators over bookkeeping procedures. Telecommunications issues were down across the board. The Nasdaq telecommunications index <.IXUT> closed off 3.4 percent while the Standard & Poor's telecommunications equipment index <.SPCOMM> was down 5.2 percent. The surprise warning from Lucent came just three weeks after the top U.S. telecom gear maker said it was comfortable with estimates. Leading mobile phone maker Nokia's warning on handset sales countered reports last week that wireless service providers were adding more customers than expected. "In the technology world there is no sign of a pick-up," said Fred Hickey, editor of the highly-regarded investment newsletter The High-Tech Strategist. "You had Lucent pre-announce today and Nokia pre-announce today. It's the same story, there is no spending by corporations because we have massive overcapacity, massive spending over the years." Shares of Lucent closed off 67 cents, or 10.7 percent, at $5.59. On Nasdaq, WorldCom shares closed down 11.99 percent, or $1.08, to $7.93. Qwest fell 5.39 percent, or 51 cents, to $8.95. Nokia's shares closed down 6.1 percent, at $22.03, on the New York Stock Exchange (news - web sites). Nokia's bad news helped drag down shares of rival mobile phone makers such as Sweden's Ericsson (news - web sites) and Alcatel of France. Ericsson responded by reiterating its financial outlook. Telecommunications equipment maker Lucent on Tuesday cut its quarterly revenue forecast and said its return to profitability would be delayed as U.S. phone companies continue to cut back on spending. "Wall street was hoping that because Lucent went into this telecoms slow down early, it would ride it out first. Now we just have a little bit more uncertainty and uncertainty is horrible in this environment," said Tom Lauria, an independent telecom equipment analyst. The news came just three weeks after Lucent said it was comfortable with estimates for sales growth of between 10 percent and 15 percent in the second quarter over the first. Now, it said it sees a "modest to 10 percent" rise. "The issue is not shifts in product purchases as much as it is an overall decline or delay in spending," Chief Financial Officer Frank D'Amelio said in a conference call with analysts on Tuesday. "Those delays became more pronounced in the last three weeks," he said. Meanwhile, Nokia warned its sales would be lower than anticipated, fueling fears the company might not be able to reach its previous sales target for growth of 15 percent for the full year. Telecom carriers and equipment makers have been hit by the global economic slowdown, excess capacity of high-speed networks, price wars and lack of user demand. As if that weren't enough, now the sector is being hit by accounting woes, too. On Monday, WorldCom said the Securities and Exchange Commission (news - web sites) requested information on a 2000 charge related to wholesale accounts, sales commissions, integration of computer systems and the company's tracking of analysts' earnings estimates. The SEC also asked for information on multimillion-dollar loans the company made to Chief Executive Bernie Ebbers. In addition, Qwest said the SEC had asked it to hand over documents related to its accounting practices. After the high-profile bankruptcies of Enron Corp. and Global Crossing Ltd. , investors have more closely scrutinized corporate accounting. Telecoms firms, with their complex corporate structures, have been a key target.