Lucent Management: "Temporary Setback"; Analysts: "Blah" (LU)

| About: Lucent Technologies (LU)
This article is now exclusive for PRO subscribers.

Lucent Chairman and CEO Patricia Russo told analysts in the company's quarterly call that:

"While we are clearly disappointed by having to change our guidance, we do consider this to be a temporary setback to the progress we’ve made and we are confident that our performance will be much stronger for the remainder of the year. Why do I say that? Despite our Q1 revenues, we continue to be encouraged by the opportunities we’re working in the opportunities we’re involved in across our portfolio and around the world and these are opportunities that align with our strengths and the investments we’ve been making."

Analysts responses were in the narrow range of mildly positive to mildly negative. The spectrum includes:

Nikos Theodosopoulos, UBS Warburg: We still are neutral on the shares, since we value the company based on revenue growth and cash-generation capabilities, and neither is an exciting story from our standpoint.

Tim Daubenspeck, Pacific Crest Securities: Lucent has a tremendous amount of competition. They need to be exposed to the good stuff that's growing as opposed to the legacy stuff that's declining.

Stephen Kamman, CIBC: They were pretty clear. Things were blah.

Ehud Gelblum, J.P. Morgan: Lucent is in a lot better shape than it was two years ago, and if you're thinking about 2007, things look pretty decent. Had it not been for the $278M charge for the Winstar settlement driving the net GAAP loss, pro forma EPS would have actually been the $0.03, we calculate.

Jiong Shao, Lehman Brothers: Following Lucent's results, we are trimming our forward EPS estimates, however, with its FY06 now more back-end loaded, we are trimming our valuation multiple and moving our price target to $3.30 or 16x CY07 EBIT per share ex pension credit of $0.20. At present, we maintain our 1-OW rating.