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

To: HiSpeed who wrote (4673)	10/14/1998 9:43:00 PM
From: Haim R. Branisteanu	Respond to of 21876

HiSpeed, no LU as all the telecom suppliers are in a profit margin squize. Due to accounting tricks LU does not pay taxes, but I think it is more that just the tricks shown. The stock is high because it is a momentum stock I am somewhat familiar with this industry from the manufacturer side. Also see the CIBC Openheimer BUY recommendation on LU ... lower gross margin....agresive pricing... for market share All this tells me lower net profits. SG&A grows almost the same with sales, and lower gross margin will not compensate for lower per $ sales in R&D expenses. In general, and not particular for LU, hardware manufacturers are under pressure and will continue to be. Siemens, ERICY and ALA have several plants operating in Eastern Europe and Russia. Very skilled workers as in the US but with a paycheck of $150 to $300 per month that's a BIG DIFFERENCE. Now I am not sure about Japan Telcom manufacturers and the others as to their presence in Asia and their competitive edge, but I know pricing is going down constantly. Secondly the US market is under "marketing attack" from those companies and they start selling. Therefore LU and NT will face stiff competition. BWDIK Haim