Lucent Systems Inc. (NYSE/LU) is usually a stock that desires some major loving. This previous Wall Road darling continues to be discarded via the herd and is now looking for some really like on the road. Buying and selling at virtually $80 in late 1999, the stock like numerous Many others within the communications sector has actually been below severe stress recently, dealing with lackluster income progress and anemic earnings.
Lucent has also gone through its share of lawsuits. Even with some Restoration from the communications sector, the realm stays a difficult spot to operate. The Levels of competition is fierce, pricing pressures are growing, and margins are minimal.
That's the truth for that communications sector, a place That is still in limbo presented the current local weather. So precisely what is Lucent suppose to perform? Shareholders have shed patience in the flexibility of chairman and CEO Patricia File. Russo in turning all-around the corporate and rendering it a star all over again.
Down 96% from its late 1999 high, the fact is traders who purchased at that level or maybe decrease will most likely in no way recover their losses. Lucent won't ever be over a cash loss for those who purchased at the upper and inflated charges.
The business is generating dollars and its forward price-earnings a number of is reasonable, but given the sluggish anticipated advancement the stocks upside can be limited.
Specified the blended outlook with the communications sector, Lucent is attempting to acquire a important hug from rival and likewise troubled France-dependent Alcatel SA (NYSE/ALA).
Lucent after staying turned down currently by Alcatel in 2001 is hoping this 2nd attempt is met with hugs and kisses, something they like to do in France.
Alcatel http://www.hamamoney.com/ is reviewing the prospective merger with Lucent, but it is inside the drivers seat as its situation is significantly better than that of Lucent. To paraphrase, Lucent requires Alcatel a lot more.
But for Alcatel, a merger with Lucent could give the company much more exposure and a longtime network in The us.
The offer if consummated may be the first of many additional to come back as having difficulties telecom providers glance for methods to chop Price tag and contend more correctly.
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