NEW YORK (TheStreet) -- Shares of Alcatel-Lucent (ALU) were gaining 6.3% to $3.54 in morning trading Thursday following reports that the French network equipment maker is in talks with Finnish competitor Nokia (NOK) about a possible merger.
Shares of Nokia were gaining 1.1% to $7.94 following the report.
The German magazine Manager Magazin first reported that talks between the two companies were taking place, citing company sources, according to Reuters. The two companies could either agree to a merger, or agree to a close cooperation, according to the report.
Alcatel-Lucent and Nokia have held similar discussions in the past before Nokia sold its handset business to Microsoft (MSFT) .
TheStreet Ratings team rates ALCATEL-LUCENT as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ALCATEL-LUCENT (ALU) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and a generally disappointing performance in the stock itself."