Lucent Systems Inc. (NYSE/LU) is a inventory that wants some important loving. This former Wall Road darling continues to be discarded through the herd and is particularly now looking for some love on the road. Buying and selling at almost $80 in late 1999, the stock like a lot of Some others while in the communications sector has actually been underneath critical pressure in recent years, going through lackluster income advancement and anemic profits.
Lucent has also passed through its share of lawsuits. Regardless of some recovery inside the communications sector, the region remains a difficult location to operate. The Levels of competition is fierce, pricing pressures are increasing, and margins are minimal.
That is the reality for the communications sector, an area That continues to be in limbo given The existing local climate. So what's Lucent suppose to complete? Shareholders have misplaced tolerance in the ability of chairman and CEO Patricia File. Russo in turning about the corporation and making it a star once more.
Down 96% from its late 1999 large, the reality is buyers who acquired at that stage or maybe decreased will probably never recover their losses. Lucent won't ever be in excess of a funds decline for those who acquired at the upper and inflated price ranges.
The company is making cash and its forward cost-earnings a number of is fair, but given the sluggish predicted development the shares upside could be confined.
Presented the mixed outlook for the communications sector, Lucent is trying to obtain a main hug from rival and likewise troubled France-primarily based Alcatel SA (NYSE/ALA).
Lucent soon after staying turned down by now by Alcatel in 2001 is hoping this 2nd try is achieved with hugs and kisses, something they like to do in France.
Alcatel is reviewing the likely merger with Lucent, but it's within the drivers seat as its situation is far better than that of Lucent. To paraphrase, Lucent needs Alcatel additional.
But for Alcatel, a merger with Lucent could give the business a lot more publicity and an established network in The usa.
The offer if consummated might be the initial of numerous more to come as struggling telecom organizations glance for methods to cut Price and contend more http://www.hamamoney.com efficiently.
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