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Excerpt from our Wall Street Breakfast, a one-page summary of this morning's key market-moving and stock-moving stories:

Alcatel, Lucent Stock Up Despite Reports [AP]

Summary: Despite reporting weak earnings yesterday, shares of French telecom equipment company Alcatel and Lucent Technologies, the company it is in the midst of buying, each rose sharply yesterday. Although Lucent reported flat earnings, its main wireless business managed results that came in above consensus. The upcoming acquisition seems to be what sparked the stocks to rise as Alcatel officials stated they were still on track to complete the $11 billion deal by year's end. The move is expected to save $1.7 billion a year for the new company which will have Alcatel at the helm. Alcatel posted a 42% drop in its third-quarter net income from the year earlier period, and blamed the decline on falling sales of its mobile network equipment, despite revenue rising 1.4%. Lucent reported earnings of $0.7 a share, the same as the year earlier period, and above the consensus estimate of $0.5 cents a share posted by Thomson Financial. Revenue rose 5 percent at the company. In trading yesterday, Lucent shares rose 6.4% while Alcatel shares closed the day up 7.15%.
Related links: Alcatel Q3 2006Earnings Call Transcript • Lucent Technologies F4Q06 (Qtr End 9/30/06) Earnings Call Transcript • Alcatel / Lucent Technologies Inc. Merger Announcement Conference Call Transcript (ALA, LU)Patricia Russo on Taking the Lucent-Alcatel Helm -- "The Buck Stops With Me"Prediction on Alcatel: Under $10 Within 3 Months (ALA) • Ciena CFO: Alcatel-Lucent Merger "A Good Thing"Lucent And Alcatel Create The Second Largest Wireless Vendor (ALA, LU, NOK, ERICY)Selling Lucent on the Alcatel Merger News (LU) • Alcatel / Lucent Merger: Implications For Wireless Business (ALA, LU)Lucent Stockholders Take Note: Alcatel Deal is No 'Merger of Equals' (LU, ALA)Lucent and Alcatel: A Merger By Any Other Name is an Aquisition
Potentially impacted stocks and ETFs: Alcatel (ALA), Lucent (LU), Cisco (NASDAQ:CSCO) • Broadband HOLDRS (NYSE:BDH)

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Source: Alcatel and Lucent Shares Rise Despite Weak Earnings