Mar, 2002 : Lucent Shares Plummet As Investors Lose Faith
📅 - Shares of Lucent Technologies Inc., a network provider, hit an all-time low on Tuesday as investors, foreseeing no increased spending this year or next, dumped the company's stock. Closing down at 47 cents, or 9.8 percent, at $4.31 on the New York Stock Exchange, Lucent (lucent.com) shares dropped below the value they were at when the company was spun off by AT&T Corp. in 1996. The shares topped the NYSE as the most active issue.
Lucent is not alone--companies like rival Nortel have suffered from the bust following the boom in spending by telecom carriers amid the global economic slump. Nortel Networks Corp.'s shares fell to lows not seen since October 1995. The Canadian equipment company's stock closed at $4.54 on the NYSE, down 2.8 percent, or 13 cents. The Standard & Poor's telecommunications equipment index closed down 2.72 percent.
While many thought telecom spending would pick up in the second half of this year, analysts said recent financial warnings from Lucent and more gloom-and-doom predictions from telecom carriers paint a different picture.
Making matters worse, analysts also said Monday's news that Deutsche Telekom slashed its 2001 dividend by 40 percent and delayed its debt reduction goals is also weighing on the sector.
?They're an important customer for Lucent,? Merrill's Leopold said. ?I doubt they're losing them; it's just a question of Deutsche Telekom's financial position.?
?It's investors absorbing what many of us have been saying for some time -- essentially that the capital spending environment still looks weak, and we do not expect any recovery in 2003,? said Merrill Lynch analyst Simon Leopold.
Surprising analysts last week, Murray Hill, New Jersey-based Lucent cut its quarterly revenue forecast, having said just three weeks before that it expected to meet its financial targets. The company, which has eliminated tens of thousands of jobs, closed facilities and shed operations, also said its return to profitability would be delayed until fiscal 2003.
The dim outlook in telecom spending led several analysts on Monday to downgrade their estimates for Nortel, sending its shares tumbling. The analysts said the company will have to ratchet down its financial expectations for the coming quarters.
?Any company in this space which is this big and this diverse will have a hard time hiding from the general down spending trend,? Leopold said.
Lucent is not alone--companies like rival Nortel have suffered from the bust following the boom in spending by telecom carriers amid the global economic slump. Nortel Networks Corp.'s shares fell to lows not seen since October 1995. The Canadian equipment company's stock closed at $4.54 on the NYSE, down 2.8 percent, or 13 cents. The Standard & Poor's telecommunications equipment index closed down 2.72 percent.
While many thought telecom spending would pick up in the second half of this year, analysts said recent financial warnings from Lucent and more gloom-and-doom predictions from telecom carriers paint a different picture.
Making matters worse, analysts also said Monday's news that Deutsche Telekom slashed its 2001 dividend by 40 percent and delayed its debt reduction goals is also weighing on the sector.
?They're an important customer for Lucent,? Merrill's Leopold said. ?I doubt they're losing them; it's just a question of Deutsche Telekom's financial position.?
?It's investors absorbing what many of us have been saying for some time -- essentially that the capital spending environment still looks weak, and we do not expect any recovery in 2003,? said Merrill Lynch analyst Simon Leopold.
Surprising analysts last week, Murray Hill, New Jersey-based Lucent cut its quarterly revenue forecast, having said just three weeks before that it expected to meet its financial targets. The company, which has eliminated tens of thousands of jobs, closed facilities and shed operations, also said its return to profitability would be delayed until fiscal 2003.
The dim outlook in telecom spending led several analysts on Monday to downgrade their estimates for Nortel, sending its shares tumbling. The analysts said the company will have to ratchet down its financial expectations for the coming quarters.
?Any company in this space which is this big and this diverse will have a hard time hiding from the general down spending trend,? Leopold said.
Reads: 1136 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/luc032002.cfm
Want to add a website news or press release ? Just do it, it's free! Use add web hosting news!