The Five Dumbest Things on Wall Street This Week
1. Lightheaded at Lucent
The lightweights at Lucent (LU) have stumbled again.
The Murray Hill, N.J., telecom-equipment maker warned late Monday of its latest disappointing quarter. Citing a slowdown in U.S. wireless-gear sales, Lucent said it expects fiscal third-quarter revenue to fall 13% short of Wall Street estimates. The poor showing sent Lucent down 6% Tuesday, while merger partner Alcatel (ALA) tumbled 5%.
"During the third quarter, our North American mobility business was adversely impacted by a slowdown in spending on some of our current-generation wireless solutions," said CEO Patricia Russo, who is slated to lead the merged company, in a statement.Adverse impacts are nothing new at Lucent. Russo was claiming last November that the growth-starved company would post a 5% sales gain for fiscal 2006. But just two months later, Lucent unveiled a huge first-quarter shortfall and backed away from the annual growth talk. Then in April, Lucent changed its mind again, saying it actually expected sales for the year to fall. At that point, the company finally ended its longstanding charade of providing annual guidance and then repeatedly changing it. Still, Lucent is off 29% since the merger announcement. And if Russo has learned anything from the repeated pratfalls, you sure can't tell from her comments Monday. "From [research and development] to sales, from product development to marketing, from finance to talent development," she gushes in a post-close merger update, "we are committed to being a role-model company for the 21st century." Yes, CEOs everywhere are just dying to emulate these stooges. Dumb-o-Meter score: 95. "This merger will create a world-class team that will deliver the best of both companies to customers around the world," Russo adds, as if anyone wants that.
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