Arguably the most striking aspect of a famous portrait of famed American banker

John Pierpont Morgan

is the fierce look in his eyes. It's the sort of angry look you might expect to see in the eyes of

Lucent Technologies

(LU)

investors.

Lucent, after the close of regular trading,

shocked Wall Street when it announced it expects first-quarter earnings to fall below estimates. The telecommunications-equipment giant attributed the shortfall to flat revenue growth caused by changes in customer purchasing habits, lower software revenue and lower-than-expected gross margins. The company said it expects to report earnings in the range of 36 cents to 39 cents a share, compared with 48 cents a year ago. The 29-analyst estimate from

First Call/Thomson Financial

was for 54 cents. Lucent said it expects revenue to be in the range of $9.8 billion to $9.9 billion, flat with the year-ago period.

The expected shortfall marks a sharp departure from the company's excellent earnings track record. Until now, Lucent has beat earnings forecasts in every quarter since it was spun off from

AT&T

(T) - Get Report

in 1996. Further,

Lehman Brothers'

decision yesterday morning to up the stock's target price to 95 from 90 looks unusual in light of the recent news.

Lehman downgraded Lucent to neutral from buy after the earnings warning. Lehman analyst Steven Levy, in a research note, wrote: "The downgrade is based on expectations that Lucent shares are likely to trade at a significantly lower P/E multiple until credibility and confidence are restored." The analyst also wrote that "Lucent's problems are very much Lucent-specific" and that he doesn't believe that the issues hitting Lucent "should be used by investors to condemn other systems vendors or the entire telecommunications industry."

Merrill Lynch

analyst Michael E. Ching downgraded Lucent to intermediate-term neutral from accumulate. Ching wrote that he believes the shortfall was Lucent-specific. He maintained his long-term buy rating on the stock.

Salomon Smith Barney

downgraded Lucent to neutral from buy.

For additional coverage of Lucent's earnings

warning, check out a separate story from the

TheStreet.com/NYTimes.com

joint newsroom. Also see

TheStreet.com's

past coverage of

Lucent, including an in-depth look at the company's

accounting practices.

Mergers, acquisitions and joint ventures

Ericsson

(ERICY)

is selling its

Private Radio Systems

operations to

Com-Net Critical Communications

of Pennsylvania for an undisclosed sum.

McLeodUSA

(MCLD)

, a telecommunications firm, is buying

Splitrock Services

(SPLT)

, a data communications provider, for about $1.7 billion in stock.

Seagram's

(VO) - Get Report

Universal Music Group

and

RealNetworks

(RNWK) - Get Report

set a strategic pact that will enable digital music from Universal's collection of artists to be played on RealNetworks'

RealJukebox

. Under the pact, UMG and RealNetworks will team up in online and offline digital music marketing activities.

U S West

(USW)

has taken a minority equity stake in Internet services concern

Netpliance

.

Wal-Mart's

(WMT) - Get Report

going hard core into e-tailing. Wal-Mart and Silicon Valley-based venture capital firm

Accel Partners

said they're joining forces to form

Wal-Mart.com

, a Palo Alto, Calif.-based, independent concern that they intend to take public.

Analyst actions

Warburg Dillon Read

initiated coverage of

FDX

(FDX) - Get Report

with a hold rating.

Morgan Stanley Dean Witter

upgraded Germany's

SAP

(SAP) - Get Report

to outperform from neutral.

Merrill downgraded

Weyerhaeuser

(WY) - Get Report

to intermediate-term neutral from accumulate. Merrill kept its long-term rating at buy.

Miscellany

Ticketmaster Online-CitySearch

(TMCS)

has named John Pleasants president.

The Inside Wall Street column in

Business Week

this week spotlights

Maxtor

(MXTR)

, whose stock could be hot soon because the company is poised to unveil a variety of Web-enabling and Linux storage server products and because a major PC maker is said to be in talks to buy

Hyundai's

36% stake in the company. Maxtor is a hard disk drive provider for PCs.

Two other stocks garner bullish mention in the column:

True North Communications

(TNO)

, the world's sixth-largest ad agency, and

@plan

(APLN)

, which some analysts say is undervalued.

For analysis of the market's preopen tone and trends, see the Wake-Up Call, now published separately.