From other sites
at Zacks.com (Fri, 10:40AM)
at CNBC.com (Thu, 12:43PM)
Pre-Market Most Active for Dec 18, 2014 : RAD, BP, PBR, ALU, NOK, TVIX, AAPL, QQQ, MBT, XIV, ARMH, ASPXat Nasdaq.com (Thu, 8:39AM)
Pre-Market Most Active for Dec 8, 2014 : CBST, TVIX, PSEC, AAL, ALU, AAPL, SDRL, BAC, VOD, KB, BABA, BPat Nasdaq.com (Dec 8, 2014)
at CNBC.com (Dec 4, 2014)
at Zacks.com (Nov 19, 2014)
at Zacks.com (Nov 18, 2014)
at Nasdaq.com (Nov 17, 2014)
at Zacks.com (Nov 7, 2014)
at Zacks.com (Nov 4, 2014)
- Wedbush may have correctly identified future growth in IP switching, but has the wrong beneficiary.
- ALU has beaten CSCO handily in IP routing the last several years.
- With a deeper portfolio of products, ALU's growth may not slow; CSCO is showing no signs of growth.
Small Cells And SDN Should Help Alcatel-Lucent Sustain Its Momentum
- Alcatel-Lucent is focusing on a number of growth markets that will help it sustain its momentum, including small cells and virtualization.
- The small cell market will grow at a CAGR of 48% till 2019, and Alcatel is well-positioned to make the most of this due to its relationships with telecom carriers.
- Alcatel's Nuage venture is gaining customers at a good pace.
- Alcatel is expected to outperform the overall industry in terms of earnings growth in the next five years.
Why Alcatel-Lucent Investors Should Rest Easy About AT&T's CAPEX
- ALU fell harder than any large equipment vendor after AT&T's CAPEX guidance for 2015.
- ALU's operating focus lies in IP routing, IP switching, neither reflect areas where AT&T will see spending cuts.
- AT&T is becoming less important to ALU, as China takes center stage for ALU.
- 20% of ALU's business is worth more than its entire market capitalization.
- Michel Combes has worked his magic at Alcatel-Lucent by restructuring the business strategically, and he is now looking to increase revenue.
- Core networking is a growth area that Alcatel will be able to benefit from as it counts leading telecom players as clients, and it has been landing new design wins.
- Voice over LTE is a high-margin growth opportunity that Alcatel is pursuing.
Alcatel-Lucent: All Eyes On The November 11 Investor Day
- Alcatel-Lucent could provide more granularity on its FY15 outlook at its November 11 investor day.
- We expect the company to reassure investors about its EUR7bn Core Networking revenue target as its recent efforts on cable, Internet players and large enterprises are starting to pay off.
- The risk is on the upside as most investors are skeptical about Alcatel-Lucent’s ability to reach its guidance.
- Alcatel-Lucent surprised investors with respectable revenue and gross margins.
- Investors now move their attention to the fourth quarter and 2015.
- Based on valuation and growth expectations, will shares double?
Update: Alcatel-Lucent's Impressive Q3 Earnings Confirm Our View
- The company announced impressive third-quarter earnings.
- We had mentioned in our article that progress on the shift plan remains strong.
- We maintain that ALU is a solid long-term investment and it will achieve its targets.
- The recent fall in the stock price is not due to the poor performance of the company.
- Alcatel-Lucent remains on track to meet its objectives and achieve profitability by the middle of next year.
- The company is making progress on the strategy and its IP-Networking and ultra-broadband segments are growing at an impressive pace.
- The consensus estimates show that ALU will report a net loss of 2 cents when the company reports its third quarter earnings.
Alcatel-Lucent: Mr. Combes, The Moment Of Truth Has Come
- Mr. Combes has now to deliver on his promises.
- Another miss in IP networking and the sanction would be brutal for the stock.
- That said, expectations have been reset and are rather low now. The most important metric to watch is cash flow.
- We will also pay attention to the patent monetization outcome.
- Weak market conditions pushed Alcatel-Lucent shares to yearly lows.
- Company developments positive and restructuring program positive.
- Merits of buying stock discussed.
Update: Alcatel-Lucent's Sale Of Enterprise Segment Has Reaffirmed Our Bull Case
- The company announced the completion of the sale of its enterprise business to China Huaxin.
- The transaction will allow the company to meet its shift plan and have €1 billion ($1.26 billion) in asset sales by the end of 2015.
- The transaction reaffirms our view that this will help it meet its operational and financial targets and the ALU remains a solid turnaround play.
Alcatel-Lucent Targets Mexico's National Mobile Network Project
- Alcatel-Lucent leads the consortium that made the first bid for the Mexican government’s $10 billion national mobile network project.
- Alcatel-Lucent’s cost-efficient 3G/4G solutions may help it beat the 'packaged-loan-fueled' strategy of Huawei.
- Mexico is posting double-digit growth rate in smartphone sales.
Alcatel-Lucent: U.S. Resilience And Patent Monetization Initiatives Give Confidence Heading Into Q3
- We are increasingly confident heading into Alcatel-Lucent’s Q3.
- The U.S. market seems to be stronger than expected, while comps will be much easier than in Q2 in the key IP routing segment.
- Alcatel-Lucent’s recent patent monetization initiatives could also create significant value.
Alcatel-Lucent: Globe Telecom LTE Contract Might Be Worth $200 Million
- Alcatel-Lucent wins another important LTE contract from Globe Telecom. I guesstimate that the contract might be worth $200 million.
- The Philippines has a weak but very promising LTE market.
- China's belligerent policy against its Asian neighbors is favorable to Alcatel-Lucent.
- The shift to 5G technology over the next few years will create opportunities for networking equipment manufacturers.
- ALU's focus on the ultra-fast broadband, IP Networking, 4G-LTE and small cells will result in better profitability for the company as these segments are growing rapidly.
- Recent contract wins and partnerships will result in further growth in the revenues as well cash flows of the company.
- ALU's partnership with Qualcomm will allow the company to enhance its small cell capabilities and strengthen its market position.
Why Alcatel-Lucent's Pullback Is A Buying Opportunity
- Alcatel-Lucent is aggressively cutting costs and management expects to achieve profitability by the end of 2015.
- Alcatel's core networking segment is gaining strength with new contract wins and the company is now looking to diversify into more segments.
- Analysts expect Alcatel to deliver tremendous growth in the bottom line in the next five years, which makes it an interesting investment at a forward P/E of just 15.
- Growth in broadband access and small cells will propel Alcatel-Lucent's top line higher in the long run.
- Alcatel's impressive product development and strong customer base should not be ignored by customers.
- Alcatel is already reporting good growth in the margins, and its bottom line is expected to improve at an impressive rate in the long run.
- Focus on high-growth areas has allowed the company to enhance its gross margin and expected growth in 3G and 4G will support the future growth.
- The shift plan is going smoothly and the IPO of the submarine cable unit will bring ALU closer to its target of €1 billion in asset sales.
- Early payment of the debt frees up patents and intellectual property and reduces the overall debt level of the company, resulting in a stronger balance sheet.
- VoLTE segment has solid growth potential and it might prove to be a major growth driver for the company in the future.
Wed, Sep. 17, 9:20 AM| 8 Comments
Thu, Aug. 28, 12:31 PM
- BofA/Merrill's Chris Hogg has removed Alcatel-Lucent (ALU +1.5%) from his firm's Europe-1 list. However, Bernstein's Pierre Ferragu has upgraded the telecom equipment vendor to Outperform, and hiked his target to €3.50 ($4.63).
- Much like JPMorgan, Ferragu argues Alcatel's carrier IP networking ops (routers/switches) are the company's crown jewel: He estimates the business is worth €2/share ($2.64/share) by itself, assuming a valuation of 2.6x sales (similar to Cisco/Juniper's multiples).
- He's less positive on Alcatel's optical and traditional wireline units - he calls the businesses "fundamentally ex-growth and very unattractive for equipment vendors" - and declares its mobile infrastructure unit "has lost the scale necessary to matter globally and is now a passive player outside of North America." But Ferragu nonetheless thinks the mobile ops could be of value to a bigger player such as Nokia.
- Alcatel's IP routing sales fell 7% Y/Y in Q2, a reversal from Q1's 16.4% growth. The company insisted tough comps were to blame, and that the market continues to grow. Cisco and Juniper have each reported their carrier router sales have been hurt by soft near-term capex.
Thu, Aug. 14, 12:40 PM
- Six firms have hiked their Cisco (CSCO -2.8%) targets after the company beat FQ4 estimates, issued mixed FQ1 guidance, and announced plans to cut another 6K jobs. But that isn't stopping shares from selling off due to worries about weak demand from carriers (orders -11% Y/Y) and emerging markets (orders -9%).
- "Notwithstanding the fact that capex will be fairly weak in [2H14], Cisco's [carrier] order performance in the first calendar half of 2014 demonstrates meaningful share loss in addition to soft carrier spending," says MKM (Neutral).
- Nonetheless, the firm thinks Cisco's total orders will rise at or near a low double-digit % in FQ1 (favorable comps will help). "We still believe it is profitable to own Cisco when orders and revenue growth are accelerating."
- Bulls are focusing on healthy enterprise orders and strong early uptake for the Nexus 9000/ACI SDN and networking virtualization platform. John Chambers mentioned on the CC (transcript) the platform's customer count more than tripled in FQ4 to 580+, and that there are over 60 customers for the related APIC software controller (just launched).
- Several peers and suppliers with strong carrier exposure are selling off. Cisco's numbers follow a soft outlook from JDS Uniphase, and coincide with light guidance from Oclaro. ALU -1.6%. JNPR -1.8%. FN -7.4%. ZHNE -2.1%. EZCH -3.8%.
- Prior Cisco earnings coverage
Thu, Jul. 31, 9:49 AM
- Alcatel-Lucent's (ALU -8.2%) Q2 revenue of €3.28B ($4.39B) slightly missed a $4.41B consensus. EPS of -€0.11 (-$0.15) was below a -$0.01 consensus.
- Along with its results, Alcatel announces it's planning a 1H15 IPO for its submarine optical cable unit, previously reported to be on the block.
- Q2 results were hurt by a major reversal for Alcatel's higher-margin Core Networking ops: Sales fell 10% Y/Y to €1.37B, after having risen 6.9% in Q1. IP routing (seen as a growth driver) -7% vs. +16.4% in Q1, with tough comps blamed; IP transport -6.2% vs. +8.6%; IP platforms -19.2% vs. -6.9% (attributed to attempts to "rationalize" the product portfolio).
- The Access segment was healthier, with sales rising 9.5% after falling 4.2% in Q1. Wireless access +28.1% to €1.3B due to strong 4G infrastructure spend (also seen by peers), fixed access +2.9% to €521M.
- Geography breakdown: North America -2.6% Y/Y to €1.49B, Europe -7.2% to €724M, Asia-Pac +25.2% to €667M, rst of world -15.2% to €396M.
- Gross margin +140 bps Y/Y to 32.6%. SG&A spend -13.9% to €396M, R&D spend -5.5% to €536M. Alcatel ended Q2 with €6.2B in cash/investments, and €6.4B in debt.
- Q2 results, PR
Thu, Jul. 31, 9:11 AM| 4 Comments
Thu, Jul. 31, 8:49 AM
Wed, Jul. 30, 5:30 PM
- AAWW, ABMD, ACIW, ACOR, ADP, AGI, ALKS, ALU, AMRC, APA, ASEI, ATK, AVP, AYR, AZN, BDX, BG, BGCP, BKCC, BLL, BUD, BWA, BZH, CCJ, CDW, CEVA, CHTR, CI, CL, CME, CNSL, COMM, COP, COT, CRCM, CRR, CTCM, CVI, CVRR, DDD, DISCA, DLPH, DTV, ENDP, EPD, EXC, FCH, FCN, FIG, FLY, FRM, GEL, GG, GIL, GLOP, GMT, GNRC, GTLS, H, HGG, HL, HP, HST, IDA, IMN, INCY, IRDM, IRM, ITT, IVZ, K, KMT, LKQ, LLL, LM, MA, MCK, MD, MDP, MNTA, MOD, MOS, MPC, MPLX, MSCI, MTOR, MWIV, NGD, NI, NJR, NWL, OAK, OCN, ODFL, OXY, PCG, PCRX, PES, PNR, PNW, PPL, PRFT, PWR, Q, RFP, RYL, SBH, SC, SCG, SFY, SHOO, SNAK, SNMX, STC, STRA, STRZA, SUP, SWC, TE, TEVA, TKR, TRP, TWC, UAN, UPL, USAK, VG, VICL, VNTV, VRX, WLT, WWE, XEL, XOM, XRAY
Thu, Jul. 24, 9:29 AM
- Nokia's (NYSE:NOK) telecom equipment unit (Nokia Networks) saw its revenue drop 8% Y/Y in Q2 to €2.57B (87% of all revenue from continuing ops). But that was an improvement from the 17% drop seen in Q1. Networks revenue is still expected to grow Y/Y in 2H.
- In addition, the unit's mobile broadband (equipment) revenue grew 6% to €1.36B, after being flat in Q1. Its services revenue declined 19% to €1.19B, after falling 25% in Q1. China (+18%) was strong, Latin America (-35%) was weak.
- Division op. margin fell 80 bps to 11%. But Nokia now expects Networks' 2014 op. margin to be "at or slightly above the high end" of a long-term target range of 5%-10%. The company previously guided for the margin to be "towards the higher end" of the range.
- Networks' sales were hurt by contract exits and divestments, lower maintenance/implementation work, and falling 3G orders. They benefited from rising 4G and core network orders (boosted by rising data traffic).
- Here revenue rose fractionally to €233M after declining 3% in Q2. Technologies (IP licensing) revenue rose 1% to €147M after growing 7% in Q1.
- Gross margin +40 bps to 44%. Nokia ended Q2 with €6.5B in net cash. It expects to start its buyback program soon.
- Alcatel-Lucent (NYSE:ALU) is also up. Nokia and Alcatel both rose last week following's Ericsson's Q2 numbers.
- Q2 results, PR (.pdf), slides (.pdf)
Fri, Jul. 18, 10:55 AM
- After declining 13% Y/Y in Q1, Ericsson's (ERIC +8.3%) Networks (mobile infrastructure) sales rose 3% in Q2 to SEK29B ($4.26B), thereby fueling a revenue beat.
- That, in turn, is sparking a rally in rivals Alcatel-Lucent (ALU +5.3%) and Nokia (NOK +2.7%). Nokia reports on July 24, and Alcatel on July 31.
- Ericsson's remarks suggest mobile data demand drove the turnaround: Much of its sales growth came from radio access (base station) demand; sales of IP edge and IMS products were also strong; and capacity upgrades in "advanced LTE markets" (such as the U.S.) were solid due to "operators’ focus on network performance as a key differentiator." 11 new contracts were signed for Ericsson's SSR 8000 routers.
- "The usage of networks on 4G is high so operators need greater density and improvement in capacity," says CEO Hans Vestberg. He adds orders are finally being fulfilled for Chinese 4G contracts.
- Global Services revenue remains soft, declining 7% to SEK23.1B ($3.38B) after falling 5% in Q1. Support Solutions +21% to SEK2.8B ($410M) vs. +13% in Q1.
- Gross margin was 36.4%, -10 bps Q/Q but +400 bps Y/Y. Op. margin jumped 280 bps Y/Y to 7.3%. "To us, industry fundamentals will strengthen as mobile broadband networks mature, allowing Ericsson and its peers to present higher profitability," predicts ABG's Sundal Collier.
- Q2 results, PR (.pdf)
Fri, Jul. 18, 9:15 AM
Wed, Jul. 2, 5:23 PM
- Alcatel-Lucent's (ALU +4.2%) core networking unit (routers, optical networking gear, telecom software) "could be worth more than the total value of the entire company" if it was a standalone business, thinks JPMorgan's Sandeep Deshpande, who upgraded shares to Overweight this morning.
- Deshpande notes Alcatel forecasts core networking (revenue +6.9% Y/Y in Q1 to €1.35B) will see over €7B ($9.6B) in 2015 revenue with an op. margin north of 12.5%.
- He adds the routing business (revenue +16.4% in Q1) is Alcatel's "most significantly profitable segment." The unit has benefited from edge router market growth - Alcatel is the market's #2 vendor, behind Cisco - as well as rising mobile data traffic and a successful entry into a core router market long dominated by Cisco/Juniper.
- Alcatel's cost-cutting efforts are also praised - 2013 fixed cost reductions of €335M beat a €250M-€300M target, and opex fell 12% Y/Y in Q1.
- At the same time, Deshpande admits the company's low-margin wireless access business (revenue +2.3% in Q1 to €999M) remains a "problem child," with Alcatel struggling to land 4G infrastructure deals outside of the U.S. and China. He thinks the unit could fetch €2B or more in a sale.
Wed, Jul. 2, 9:25 AM
- Citing a favorable valuation following its recent selloff, JPMorgan has upgraded Alcatel-Lucent (ALU) to Overweight.
- Prior to the upgrade, the telecom equipment vendor's shares had fallen 20% YTD. They go for 0.96x 2014E sales after factoring net debt.
Mon, Jun. 2, 6:53 PM
- Alcatel-Lucent (ALU) is issuing €1B ($1.36B) in convertible bonds - a €600M tranche due Jan. 2019, and a €400M tranche due Jan. 2020 - to help pay down a $1.75B credit facility obtained last year as part of a debt restructuring deal with Goldman and Credit Suisse.
- The convertible offering could eventually lower Alcatel's debt load, albeit at the cost of dilution. The company had €5.5B ($7.5B) in debt at the end of Q1, a quarter for which free cash flow was -$398M.
- Moody's rates Alcatel's debt B3 - a rating six notches into junk territory. S&P has a comparable B- rating.
- Previous: Telecom hardware stocks slide on AT&T capex report
Mon, Jun. 2, 4:43 PM
- Jefferies reports AT&T (T -0.1%) significantly cut its wireline capex starting last month.
- It thinks many companies could be affected, including equipment vendors Alcatel-Lucent (ALU -2.2%), Ciena (CIEN -3.9%), Juniper (JNPR +0.2%), and Adtran (ADTN -5.1%), and component vendors JDS Uniphase (JDSU -2%) and Finisar (FNSR -0.7%).
- As its is, AT&T's 2014 capex budget ($21B) is down $200M from 2013's spending level. Moreover, the carrier's huge mobile infrastructure needs and the DirecTV deal could be motivating it to cut wireline spend.
- Also: AT&T may be looking to keep capex down ahead of the full rollout of Domain 2.0, an initiative meant to improve network flexibility, lower costs, and cut provisioning times through the embrace of software-defined networking (SDN) and network functions virtualization (NFV).
- MKM has argued Domain 2.0 will be a negative for Cisco, but a positive for Ciena and Finisar, among others.
Thu, May. 22, 6:08 PM
- Alcatel-Lucent (ALU -2.8%) is in talks with French security hardware firm Thales to sell its cybersecurity ops. No potential deal price has been given yet.
- The unit has 90 European employees. Its sale is part of a larger effort to unload €1B ($1.37B) worth of assets by 2015.
- Many tech companies have been going in the other direction, acquiring cybersecurity startups to address growing enterprise/government interest.
- Alcatel has thus far announced deals to sell €400M ($548M) in assets, including a government products unit that fetched $200M.
- Bloomberg reported in January the company is in talks with multiple firms to sell its slumping enterprise hardware/software unit.
Wed, May. 14, 5:44 PM
- Cisco's FQ3 beat, above-consensus FQ4 guidance,, and positive CC commentary are providing a lift to networking equipment rivals and component suppliers.
- Up AH: ALU +1%. JNPR +1.6%. FFIV +0.8%. FNSR +2%. JDSU +1.5%. RVBD +0.9%. JBL (a major Cisco contract manufacturer) +0.8%.
- Cisco's product orders were nearly flat Y/Y in FQ3 after falling 4% in FQ2. U.S. orders (+7%, with 10%+ increases in enterprise/SMB orders) provided a boost, as did a 4% increase in Northern European orders.
- The company's service provider orders fell another 5% Y/Y (router/set-top share loss), but that was better than FQ2's 12% drop. Emerging markets (-7% vs -3% in FQ2) also remained weak.
ALU vs. ETF Alternatives
Other News & PR