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

To: HiSpeed who wrote (4294)	9/21/1998 12:54:00 PM
From: yard_man	Respond to of 21876

Manipulation? I dunno.

To: HiSpeed who wrote (4294)	9/21/1998 2:15:00 PM
From: yard_man	Respond to of 21876

Anybody know what LU's exposure is here? Monday September 21, 1:52 pm Eastern Time FOCUS-Philipsprofit warning fells market (Adds more detail, analysts' comments, closing share price) By Philip Blenkinsop AMSTERDAM, Sept 21 (Reuters) - Dutch electronics conglomerate Philips (NYSE:PHG - news) on Monday sharply downgraded its 1998 profit forecast, sending its shares tumbling and the AEX blue-chip index sliding to its lowest level this year. ''Excluding the results of PolyGram, (Philips) expects to generate income from normal business operations in 1998 at about the same level as in 1997,'' the company said in a statement. In 1997, the company booked net profit from ordinary operations excluding PolyGram of 2.712 billion guilders ($1.43 billion). Two months ago, Philips reiterated its forecast of double-digit profits growth over the full year provided the knock-on effects from Asia did not worsen. ''We have to accept that the economic environment has deteriorated,'' Philips President Cor Boonstra said on Monday. The news had an immediate effect on the company's shares which slid 17.00 guilders, or 17.2 percent, to close at 82.00 guilders. They were at 91.00 guilders before the announcement. Philips stock had already slid over 15 percent last week and are way below the May 15 peak of 204.30 guilders. Monday's tumble alone effectively wiped some 6.1 billion guilders from the value of the company. Analysts and dealers said the shares could have fallen even further were it not for the fact that Philips simultaneously announced it planned to buy back around eight percent of shares outstanding by the year-end. ''In these circumstances (the share buy-back) is good news. It doesn't hurt a company,'' said Edwin Flick, analyst at MeesPierson. The Philips profit warning hit an already jittery market, forcing bourse regulators to suspend trade for 15 minutes as the AEX index looked set to enter freefall, dropping 74.39 points to 885.18 points -- the lowest level this year. Philips said 1998 earnings would be pressured by a ''significantly higher loss'' for Philips Consumer Communications (PCC), its telephony venture with Lucent, and depressed income from Display Components. Philips President Cor Boonstra said the company was reviewing ''all options'' with respect to PCC and would report the findings when it publishes third quarter earnings figures on October 22. Less than a month ago, Philips said its troubled telecoms unit -- a 60:40 joint venture with Lucent (NYSE:LU - news) -- was unlikely to break even by the end of the year. Monday's comment suggested Philips might even be considering bailing out. ''We think Philips will probably lose in the region of one billion guilders ($528 million) for PCC this year. If PCC goes, so does Philips' growth strategy. It is part of the Philips' core strategy for electronics,'' said a London-based analyst who declined to be named. Boonstra has shown for two years he is capable of stripping away the ''bleeders,'' but he has yet to prove he is capable of expanding the group, analysts said. Ironically, with his first -- and to date most significant -- new project, Boonstra may have created his own bleeder. Boonstra said third quarter earnings would show a significant decline, mostly due to PCC, Components and lower margins in Semiconductors -- although the latter would still be ''very respectable.'' ''In the fourth quarter, which is traditionally the best quarter for our company, we expect income from normal business operations to improve again,'' Boonstra said. Philips also said it expected to complete the sale of its majority stake in PolyGram by late October or early November, adding the divestment would generate a very large extraordinary gain. Philips is selling the music and film company, in which it owns a 75 percent holding, to Canada's drinks and entertainment group Seagram (Toronto:VO.TO - news). ($1 equals 1.898 Guilder)