Lucent Technologies Inc. (NYSE/LU) is a share that wants some main loving. This former Wall Street darling continues to be discarded by the herd and is now trying to find some adore on the Street. Investing at practically $80 in late 1999, the share like several others inside the communications sector may be underneath severe pressure in recent several years, facing lackluster revenue growth and anemic income.

Lucent has also gone via its share of lawsuits. In spite of some recovery inside the communications sector, the area remains a hard place to operate. The competition is fierce, pricing pressures are growing, and margins are low.

That is the reality for the communications sector, an region that remains in limbo given the current climate. So what is Lucent suppose to accomplish? Shareholders have lost patience inside the capability of chairman and CEO Patricia F. Russo in turning all-around the organization and making it a star once again.

Down 96% from its late 1999 high, the actuality is investors who bought at that amount or even lower will probably by no means recover their losses. Lucent will never be much more than a capital loss for those that purchased at the higher and inflated costs.

The company is producing funds and its forward price-earnings multiple is reasonable, but offered the slow expected growth the stock’s upside may possibly be restricted.

Given the mixed outlook for the communications sector, Lucent is trying to obtain a major hug from rival and also troubled France-based Alcatel SA (NYSE/ALA)

Lucent after being rejected previously by Alcatel in 2001 is hoping this second attempt is met with hugs and kisses, one thing they adore to complete in France. 

Alcatel is reviewing the prospective merger with Lucent, nonetheless it is inside the driver’s seat as its position is a lot far better than that of Lucent. In other words, Lucent requirements Alcatel more.

But for Alcatel, a merger with Lucent could give the organization much more exposure and an established network in america. 

The deal if consummated might be the first of many more to arrive as struggling telecom companies try to find methods to cut cost and compete more efficiently.

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