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

To: sylvester80 who wrote (19331)	3/13/2002 9:54:33 AM
From: elmatador	Read Replies (2) \| Respond to of 21876

why touch wireline equipment suppliers with a barge-pole Lucent Published: March 12 2002 20:46 \| Last Updated: March 13 2002 08:26 news.ft.com Lucent has ditched its pledge to restore profitability and stop leaking cash this year, and the Agere spin-off is on hold. The odd thing is that the stock registered such disappointment and that the ratings agencies waited for a prompt. It is a mystery why Lucent maintained the pretence. It has long been hard to square its targets with statements by customers. The gap between consensus revenue forecasts for the fixed line equipment providers and capital spending forecasts for carriers has long suggested more widespread cognitive dissonance. Patricia Russo, new chief executive, might have wanted more time before dumping Henry Schacht's promises. But part of the reason for appointing a Lucent old-timer was to skip a lengthy warm-up. Lucent has scaled back its sales forecast. Yet when Nortel cut its numbers a month ago, Lucent stood pat. Either things have got measurably worse or it has no clue about the sales outlook. Neither is encouraging. Spending by US telecommunications companies is set to decline by 20 per cent or more this year. How much it declines next year is anyone's guess. The telecoms carriers face declining revenue, are in financial trouble, and half of them seem to be answering SEC questions - in WorldCom's case, rather fundamental ones. Lucent is going to have to issue $1.5bn of convertible bonds to shore up its liquidity position, just seven months after it issued $1.9bn of convertibles on punitive terms, meaning more dilution for shareholders. Like Nortel, it trades on less than two times sales. Until the customers stabilise, why touch wireline equipment suppliers with a barge-pole