Lucent Technologies Inc. (NYSE/LU) is actually a inventory that demands some big loving. This previous Wall Avenue darling continues to be discarded from the herd and it is now trying to find some appreciate on the Street. Trading at practically $80 in late 1999, the inventory like several Other people during the communications sector continues to be underneath critical stress in recent times, dealing with lackluster earnings expansion and anemic income.
Lucent has also passed through its share of lawsuits. Even with some recovery while in the communications sector, the world stays a complicated place to operate. The Level of competition is intense, pricing pressures are rising, and margins are small.
Which is the truth for that communications sector, a location That is still in limbo given the current climate. So what exactly is Lucent suppose to try and do? Shareholders have missing patience in the ability of chairman and CEO Patricia File. Russo in turning all over the corporate and making it a star once more.
Down ninety six% from its late 1999 higher, the truth is traders who acquired at that level or perhaps decrease will most likely never ever recover their losses. Lucent will never be over a funds loss for those who bought at the higher and inflated charges.
The business is generating dollars and its forward value-earnings numerous is acceptable, but provided the sluggish anticipated expansion the stocks upside could be limited.
Supplied the blended outlook to the communications sector, Lucent is trying to acquire a key hug from rival and in addition troubled France-based mostly Alcatel SA (NYSE/ALA).
Lucent right after getting turned down already by Alcatel in 2001 is hoping this second attempt is met with hugs and kisses, a little something they like to do in France.
Alcatel is reviewing the prospective merger with Lucent, but it is from the motorists seat as its position is a lot better than that of Lucent. In other words, Lucent wants Alcatel more.
But for Alcatel, a merger with Lucent could give the corporate additional exposure and a longtime network in The usa.
The deal if consummated may very well be the main of many much more to come back as battling telecom companies look for ways to cut Charge and compete much more properly.
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