Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Lucent Technology
After conducting a DuPont decomposition of Lucent's return on equity (ROE) from the first quarters of 1998, 1999, and 2000 it is essential to realize that those ROEs are, in order, .238, .179, and .072. It is highly important to see the downward trend in those ROEs, which was not commensurate with the company's stock during this time period. The company's stock was steadily rising while its ROE was steadily declining. There were several key factors that contributed to the differences in the company's performance during these key quarters. One of those factors was that the total shareholder equity had increased disproportionately to the company's net income and total assets. The shareholder equity in the first quarter of 2000, 16,079, was nearly four times that in the first quarter of 1998 ($4,671). This four times increases simply was not reflected in the company's assets, which increased from the...
The same disproportionate increase in sales also was not commensurate with that of the shareholders equity, the latter of which doubled nearly every year.
2.
Upon evaluating the seasonally adjusted change in Lucent's sales, accounts receivable, inventory, and gross margin for each of the five quarterly periods from December 1998 to December 1999, it is evident that the company was ultimately experiencing financial woes prior to the time in which it went public with them. The most alarming figures are seen in its gross profit margin, which steadily declined after the March of 2009 quarter. The seasonally adjusted change in its sales fluctuated tremendously, rising and falling multiple times during this period, while its accounts receivables decline after June of 1999. It is…
3.
There is definitely evidence that suggests that Lucent's record streak of earnings was ending midway through 1999, before the dramatic drop at the beginning of the year 2000. That evidence I pertains to the decline in the gross margin that was discernible in June of 1999. There is some merit to the class action lawsuits because the company did not go public with this decline, which certainly overrides its fluctuations in sales that are apparent after reflecting upon the seasonally annual change in the five quarters examined. Additionally, the company's claim that that there were lower software revenues due to customers acquiring software more evenly through the year are largely unsubstantiated, and make it appear as though the company is floundering for excuses. More importantly, all of the press releases that the company provided during the latter half of 1999 certainly belie the reality of its financial woes, and make such lawsuits deserving alone.
I would not expect Lucent's earnings to recover by the second quarter of 2000. Obstacles to such a recovery include a tarnished reputation, too much inventory, and a steady decline in gross margin that are adversely affecting the company.
But it remains uncertain if communications industry stock is a good investment overall, even if the general economy is improving, and Lucent has moved ahead within the framework of its industry. In its competitor environments, communications stock with less of an emphasis on R&D than Lucent, and more of an emphasis on providing competitive rates to customers, such as Vodaphone and Motorola, Lucent lags behind. If Lucent cannot compete with
Lucent Technologies, and their drop from a top-Rated company to one in danger of bankruptcy. WHAT WENT WRONG At one time, Lucent Technologies was the most widely held stock in the United States. Therefore, when they issued an earnings warning in 2000, most of the financial world was shocked. How could Lucent lose money? Some advisors were not caught off guard, and had been warning about Lucent for months, including the
80%). (Yahoo-Finance, 2004) the telecommunications equipment segment faces constant fluctuation in demand and this fluctuation can cause serious financial drains on the company. Lucent, for example, was hit hard when the technology bubble burst a few years ago. It was left holding the bag for a host of bankrupt customers. Holding on to outdated technology and the reticence to switch to newer technology also harmed the company during this stage.
BluetoothTM is a low cost, low power, short-range radio technology- originally perceived as cable replacement alternative for the cable / wire connected devices such as mobile phone hand, headsets, and portable computers. The BluetoothTM's goals expanded to include standardized wireless communications between any electrical devices and created a notion of Personal Area Network. The write-up traces history of BluetoothTM starting with its unusual name to formation of Special Interest Group,
Information Technology Case Bharti Airtel is the world's fifth largest telecom company and it is famous for outsourcing everything except finance, marketing and sales. In the early days Bharti used to do all the business processes itself and it used to cost much more. Then they came up with the idea of outsourcing everything and just keep the departments of core competencies. And they kept marketing because in today's world every telecom
"They cannot translate business needs into technology solutions. Many IT executives cannot present a business case for or against a particular technology" (Jahnke, 2004, p.2). How the technology performs is baed on the approval or disapporval from those in management. The factors are presented at the technology evaluation stage, but they fail to get at the alignment aspect of it (Jahnke, 2004). This does include that of business and IT