The best-case scenario of the companies I picked shows only a 9 percent year-to-year revenue decline. Now that's not necessarily a sign that earnings will be horrible, or at least any worse than they were during the most recent quarter. But that is, collectively, a lot of revenue that will go missing from some of the sector's biggest names.
Table 1: Depressed Expectations
|Company||Expected Year-Over-Year Revenue Change for Q1 '09 (%)||Share Price Change in 12 Months (%)||Most Recent Earnings Report|
|Adtran||-9%||-27%||Adtran Reports Q4|
|Alcatel-Lucent||-19%||-71%||AlcaLu Ends 2008 With �5.2B Loss|
|Ericsson||-15%||-23%||Ericsson Soars on Strong Q4, Outlook|
|Infinera||-23%||-50%||Infinera Anchored by New Wins|
|Tellabs||-22%||-40%||Tellabs Feels the Pinch|
|Source: Light Reading, Thomson Reuters, Google Finance|
So carrier spending has slowed and is not expected to pick back up soon. And investors are as sour on the sector as ever. But I may as well ask: Does anyone see a silver lining in this cloud?
— Phil Harvey, Editor-in-Chief, Light Reading