LR Index: Dead in the Water
The Light Reading Index closed down slightly at 653.34 -- just 1.29 points and O.2 percent lower than yesterday's close.
Among today's highlights (or, more accurately, lowlights), Lucent Technologies Inc. (NYSE: LU) restated revenues for Q4 -- reducing them by $679 million due to accounting fumbles (see Lucent Starts Cleaning Up). It also announced a major cost-cutting initiative for 2001 to try and get itself back on track. Lucent traded down $1.38 to $14.12.
RCN Communications (Nasdaq: RCNC), a voice and data service provider, announced that it expects a greater loss for Q4, and said that it would cut its capital expenditures in 2001 by half. However, it isn’t clear where the cuts will occur. RCN joins AT&T Corp. (NYSE: T), Sprint Corp. (NYSE: FON), SBC Communications Inc. (NYSE: SBC), and WorldCom Inc. (Nasdaq: WCOM) as the latest carrier to revise its earning estimates downwards in the past few weeks. However, it isn’t clear how much, if at all, carriers will cut their spending on optical equipment. RCN traded down 40.9 percent to $5.19.
In sharp contrast to all the bad news from other carriers, Qwest Communications International Corp. (NYSE:Q) announced that it was reconfirming its earning estimates posted on September 7 for fiscal 2000 of $7.4 billion EBITDA (earnings before income tax, deferrals, and amortization) on sales of $18.8 billion. The company cited newer, more efficient network equipment and a product line focused on the higher growth sectors of the industry as reasons for its strong showing (see Qwest Comes on Strong). Qwest was trading up $3.88 at $36.31.
Big losers today were ONI Systems Inc. (Nasdaq: ONIS), down 26.05 percent to $36.19; PMC-Sierra Inc. (Nasdaq: PMCS), down 17.14 percent to $69.50; and Redback Networks Inc. (Nasdaq: RBAK), down 21.58 percent to $37.25.
-- Matt Malina, research associate, Light Reading http://www.lightreading.com