Alcatel-Lucent (ALU-NYSE) will have reported earnings most likely by the time most of us are half way through our sleeping in the US on Friday morning.  As a reminder they gave us guidance at 2:25 AM EST back on April 24th that was under expectations.  The company said it would have soft revenues at around 3.9 Billion Euros, down 8% on a constant currency rate.  It also forecast a 260 million Euro loss, half of which was on items.  What kept the stock higher was that it gave a book-to-bill ratio of 1.3 at the end of the quarter.  If they can capitalize off that then that will be a stabilization.

So, forget about the current earnings numbers and go straight doiwn to the company’s guidance in the press release.  Don’t forget to back out a 780 million Euro gain from te sale of a Thales transaction, so if you see that the company posted a 500 million Euro earnings number in the headline you don’t have to be fooled.  If it does not show at least some hope of better revenues on that 1.3 book-to-bill ratio then there may be some selling. 

Jon C. Ogg
May 10, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.