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

To: djane who wrote (4201)	9/17/1998 1:16:00 PM
From: Jay Rommel	Read Replies (1) \| Respond to of 21876

Finally, a post without a crystal ball prediction. I guess that settles it ... Djane, you wouldn't happen to have a PhD in Economics would you??? <ggg>

To: djane who wrote (4201)	9/17/1998 3:05:00 PM
From: Drake	Read Replies (1) \| Respond to of 21876

djane, if you could please immediately reply as to what your take is on the HUGE stock-price-drop today of VTSS (LU their largest customer)?

To: djane who wrote (4201)	9/19/1998 6:36:00 PM
From: Sonki	Respond to of 21876

Sell-out in some telecom stocks overdone -analysts By Roland Moller HELSINKI - Shares in European wireless telecom equipment makers found solid ground on Friday as confidence in strong future earnings growth returned after a shock caused by Alcatel's profit warning on Thursday, analysts said. The sharp losses on Thursday were seen as exaggerated since the value of companies like Nokia , Ericsson as well as their U.S. competitors Lucent and Motorola are driven by expected strong cash-flows in the future. The more wireless the company, the better for the stock, analysts said. "As people in Finland and Sweden know, the development in mobile telephony is more a function of time than of macroeconomics," said Gunnar Andersson, telecom analyst at Sweden's Handelsbanken. Finland and Sweden have the highest mobile phone penetration rates in the world as subscription sales and infrastructure investment soared despite recessions in the countries in the early 1990s. Finnish Nokia closed off two markka at 381 in Helsinki and Ericsson rose in Stockholm after heavy selling pressure earlier this week. "It was a knee-jerk sell-off on Thursday, people just weren't thinking," an analyst at a leading Nordic brokerage said. "Share price losses have been much bigger than any fall in net present value of cash flows." Before Alcatel warned that its operating profit growth this year would fail expectations, the market had already been battered by rumours about an impending profit warning by Ericsson. The company dismissed the talk. Some analysts said slower global growth would hit orders for telecom equipment, particularly for fixed-network solutions, but this wwas likely to be a short-term solution. "It will be just a blip," said one. Analysts said Alcatel's warnings spooked investors mainly because of the overall nervousness on the market as investors had been aware for some time already that wireless equipment deliveries to southeast Asia were in decline. They said the outlook has not changed enough to justify the over 50 percent fall in Ericsson since July 21 or the 23 percent tumble in Nokia. "There is good upside in both stocks," Handelsbanken's Andersson said. But the hoped-for recovery may not be imminent amid the current volatility and scant hopes for strongly positive news this autumn. "The current market situation is very, very uncertain. I'm worried that the market seems unable to judge valuations anymore, the reaction to Alcatel was astonishing," said Lauri Rosendahl, analyst at Aros Securities in Helsinki. He said the likelihood that projected earnings for Nokia and Ericsson in China and Latin America will materialise had fallen recently, but he had made only small adjustments to projected cash flows or parameters. Even fixed-network-biased Alcatel, which plunged 40 percent on Thursday, was finding support on Friday, trading around flat levels in Paris in line with the CAC index <.CAC>. But analysts were not convinced that Alcatel was able to recover quickly, although the share has fallen 60 percent from its year-high. Goldman Sachs reduced its recommendation on the stock to market underperformer from market performer and said investor confidence in the company's management has been shattered. "Alcatel's management seems to have lost its way along the road to its long-term eight percent margin target, now delayed by at least one year," Goldman said in a morning call note. According to data in Reuters Securities 3000, looking at forecasts made before before Alcatel's profit warning, it traded on Friday at 12.5 times 1998 earnings and 10 times 1999 earnings. This compared to Nokia's 27 and 23 times respectively. ((Helsinki newsroom, +358-9-680 50 242, fax +358-9-680 2284, helsinki.newsroom@reuters.com))