Lucent Technologies Inc. (NYSE/LU) is usually a inventory that requirements some key loving. This previous Wall Avenue darling continues to be discarded through the herd which is now in search of some appreciate on the road. Buying and selling at practically $eighty in late 1999, the inventory like lots of others during the communications sector has actually been below severe tension recently, dealing with lackluster earnings development and anemic profits.
Lucent has also passed through its share of lawsuits. Irrespective of some Restoration while in the communications sector, the area stays a difficult spot to function. The Competitors is intense, pricing pressures are growing, and margins are very low.
Which is the truth for your communications sector, a location That is still in limbo specified The present climate. So what on earth is Lucent suppose to complete? Shareholders have dropped patience in the ability of chairman and CEO Patricia F. Russo in turning all-around the company and making it a star once more.
Down ninety six% from its late 1999 substantial, the reality is traders who bought at that level or perhaps reduced will probably by no means Recuperate their losses. Lucent will never be a lot more than a money decline for the ones that ordered at the upper and inflated selling prices.
The organization is producing money and its ahead rate-earnings multiple is realistic, but specified the sluggish expected progress the stocks upside could be restricted.
Specified the blended outlook to the communications sector, Lucent is attempting to secure a main hug from rival and also troubled France-based mostly Alcatel http://www.hamamoney.com/ SA (NYSE/ALA).
Lucent right after staying rejected now by Alcatel in 2001 is hoping this 2nd try is met with hugs and kisses, some thing they love to do in France.
Alcatel is reviewing the prospective merger with Lucent, but it is during the drivers seat as its situation is significantly better than that of Lucent. To put it differently, Lucent demands Alcatel a lot more.
But for Alcatel, a merger with Lucent could give the company additional exposure and an established network in America.
The deal if consummated may be the initial of many much more to return as struggling telecom firms glance for tactics to cut Charge and compete additional correctly.
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