As the company is based in Europe, Alcatel-Lucent has far more exposure to the internal workings of Europe than most U.S.-based telecom and communications equipment players. It saw double-digit percentage declines in wireless and optics equipment, and it also said sales in North America were weak. Overall revenue was down by more than 12% to 3.2 billion euros, and the company’s gross margin fell to almost 30% from above 34% in the prior quarter for comparison. The operating margin for 2012 is looking to be better than the 3.9% of 2011, but it may not be at the 5% that the company previously targeted.

Even with the warning that uncertainty in Europe is very high, the company is still trying to maintain a target of higher profitability this year based on further cost cuts.

Here is the issue to consider. Nokia Corporation (NYSE: NOK) via Nokia Siemens and Ericsson (NASDAQ: ERIC) remain under pressure in Europe. The company claims that North America is still very challenging. If the growth markets of China, India and South America are in an overall sluggish state with much lower core economic growth rates, then what does the company really have for great prospects? It is hard to make any direct ties to Cisco Systems Inc. (NASDAQ: CSCO) any longer as the sizes are so different.

Technology companies have proven over and over that they can have cost cuts to improve operating performance. The problem is that investors want growth in the sector, or at least they prefer to invest in growth over value in the technology sector.

This feels like another empty day of promises in a turnaround story that just never really seems to be a turnaround story for very long. It is too early to see New York ADR trading for any real market depth, but the drop of almost 13% to 1.28 euros in Paris trading should pretty much sum things up. The shares traded more than an average day’s volume in the first couple of hours in Paris and its local market 52-week trading range is 1.10 to 4.47 euros.

If Alcatel-Lucent shares fall the same in New York trading after a $1.95 close then the ADRs will be somewhere around $1.70 or so and its 52-week range for U.S. concerns is $1.39 to $6.63.

JON C. OGG

The short-only equity ETF saw inflows as well this week as the market was soft earlier in the week, but that will obviously ebb and flow as the markets rise and fall.  The top ten short positions are as follows (largest first): Goodyear Tire & Rubber Co. (NYSE: GT); OpenTable, Inc. (NASDAQ: OPEN); Energizer Holdings Inc. (NYSE: ENR); Rockwell Collins Inc. (NYSE: COL); Green Mountain Coffee Roasters Inc. (NASDAQ: GMCR); Citigroup, Inc. (NYSE: C); Ericsson (NASDAQ: ERIC); Allegheny Technologies Inc. (NYSE: ATI); Best Buy Co. Inc. (NYSE: BBY); and Johnson Controls Inc. (NYSE: JCI).  Without rounding up or down, these top ten short positions account for only 32% to 33% of the entire ETF’s short positions.

Here is the ETF’s philosophy in a nutshell: “The portfolio management team implements a bottom-up, fundamental, research driven security selection process. In selecting short positions, the Fund seeks to identify securities with low earnings quality or aggressive accounting which may be intended on the part of company management to mask operational deterioration and bolster the reported earnings per share over a short time period. In addition, the portfolio management team seeks to identify earnings driven events that may act as a catalyst to the price decline of a security, such as downwards earnings revisions or reduced forward guidance.”

One thing is nearly certain here.  If investors are looking for an ETF product that bets against high valuations or against what may be market aberrations, they may have found their vehicle.

Now, here is the flip-side of this ETF.  There are two sides to every coin.  If you get into a serious bull situation this can lose incredible amounts of money.  Sometimes it is the most troubled stocks which rally the most, and it doesn’t take a rocket scientist to figure out what likely happens to the price of this ETF in that situation.

The ETF’s Net Expense Ratio is currently 3.29% but the fund noted “The Advisor has contractually agreed to keep the Fund’s Total Annual Fund Operating Expenses from exceeding 1.85% for at least a year from the date of the Prospectus. This agreement is limited to the Fund’s direct operating expenses and, therefore, does not apply to “Acquired Fund Fees and Expenses.”  The fee breakdown is as follows per the ETF fact sheet:

• Management Fee 1.50%
• Short Interest Expense 1.44%
• Other Expenses 0.22%
• Acquired Fund Fees 0.13%
• Gross Expense Ratio 3.29%

JON C. OGG

The warnings out of Nokia Corporation (NYSE: NOK) this morning were pretty harsh as the company continues to get crowded out.  Texas Instruments has suffered from Nokia’s woes before as it is a key customer of TI’s chipsets.  You cannot always draw a straight line between the two because TI does have other large customers as well.  That being said, it happened just in 2011 where Nokia’s woes translated directly to a hit in TI’s earnings.  As of last summer, ZDnet noted that Nokia was 10% to 20% of TI’s revenues.

It is almost surprising that Ericsson (NASDAQ: ERIC) is not lower as well as its shares are up 2.2% at $9.78 in New York trading.  Earlier this year there had been warnings that Ericsson could be impacted by declining sales of Nokia’s legacy Symbian smartphones.

Nokia shares have recovered some off of their lows, but the stock is still at a decade low of $4.33 after a 14% drop on a whopping 87 million shares after just over an hour of trading.

Texas Instruments Inc. (NASDAQ: TXN) is up 1.2% at $32.09 against a 52-week range of $24.34 to $35.98.  Maybe this time will be different.  Maybe.

JON C. OGG

The top calls in the last week were seen in the following: The Blackstone Group LP (NYSE: BX); Apollo Global Management, LLC (NYSE: APO); Comerica Inc. (NYSE: CMA); Dell Inc. (NASDAQ: DELL); E-commerce China Dangdang Inc. (NYSE: DANG); Excel Maritime Carriers (NYSE: EXM); First Solar, Inc. (NASDAQ: FSLR); Gilead Sciences Inc. (NASDAQ: GILD); Level 3 Communications Inc. (NASDAQ: LVLT); LM Ericsson Telephone Company (NASDAQ: ERIC); Marriott International, Inc. (NYSE: MAR); Oracle Corporation (NASDAQ: ORCL); Sunoco, Inc. (NYSE: SUN); VIVUS, Inc. (NASDAQ: VVUS); WebMD Health Corporation (NASDAQ: WBMD).  We have added in color and summaries on each.

The Blackstone Group LP (NYSE: BX) hardly budged this week.  The private equity leader was raised to Buy at Goldman Sachs and the price target was $19.00.  That gave almost 20% upside.  In the private equity upgrade was also Apollo Global Management, LLC (NYSE: APO) with a price target of $17.50 for another 20% upside or so.

Comerica Inc. (NYSE: CMA) had a bad week, and it seemed to all get that bad mojo after the stock was downgraded to Sell at Stifel Nicolaus for close to a 4% loss all in all.

Dell Inc. (NASDAQ: DELL) took two downgrades on valuation after earnings failed to offer much continued inspiration: Cut to Neutral at Citigroup; Cut to Hold at Needham.

E-commerce China Dangdang Inc. (NYSE: DANG) was a bit of an “Oops” this last week.  The e-commerce site in China saw its rating Raised to Outperform at Credit Suisse on Wednesday.  Shares tanked the next day and the stock was down almost 10% at one point the following day.  As the casino boss says after they clean you out, “Thanks for playing and better luck next time!”

Excel Maritime Carriers (NYSE: EXM) has already been slapped silly, and its rating was cut down to Underperform by Zacks after already being down over 60% in the last year.  The global shipping market is just not yet coming back into favor with many analysts.

First Solar, Inc. (NASDAQ: FSLR) was cut to Neutral at Susquehanna.  While not a huge surprise for a downgrade any longer, this was just before earnings are due and shares closed down over 4% at $35.58 on Friday.

Gilead Sciences Inc. (NASDAQ: GILD) is now much less in favor since its hepatitis C treatment appears to be far less active than previously thought.  We saw two more downgrades this last week: Cut to Market Perform at Bernstein; Cut to Equal-weight at Barclays.

Level 3 Communications Inc. (NASDAQ: LVLT) was an incredible mover on Thursday after the communications player was raised to Overweight at Morgan Stanley.  Shares rose well over 10% on Thursday and we have an analysis on its move.

LM Ericsson Telephone Company (NASDAQ: ERIC) does not get many upgrades, so it was interesting that the telecom equipment player was raised to Overweight at JPMorgan on Thursday. Shares gapped up, closed up even higher on Thursday, and shares rose almost another 2% on Friday for a total gain of over 5%.

Marriott International, Inc. (NYSE: MAR) is not at the 52-week high like so many stocks, but it was Raised to the highly prized Conviction Buy List at Goldman Sachs.  The price target is $42.00 and that leaves plenty of implied upside from the $34.73 price on Friday.

Oracle Corporation (NASDAQ: ORCL) is almost right back up to where it was before it the bottom was yanked out from under it after its poor earnings.  Apparently that is a concern to at least one… Early in the week this one was downgraded to Market Perform from Market Outperform at JMP Securities now that the stock has run from under $26 to over $29 since the start of 2012.

Sunoco, Inc. (NYSE: SUN) is into refining, so higher and higher gas prices do not really help the outfit.  This was not just downgraded to Underperform by Zacks Investment Research on Friday, it was named as Bear of the Day at Zacks.

VIVUS, Inc. (NASDAQ: VVUS) was a total home run this last week and analysts were forced to chase it higher and higher after the FDA panel recommended that Qnexa get FDA marketing approval to combat weight loss.  After the news came the following calls: reiterated Outperform but raised target to $36.00 at Credit Suisse; Raised to Hold at Brean Murray; Raised to Outperform at Leerink Swann; and Raised to Market Outperform at Rodman & Renshaw.

WebMD Health Corporation (NASDAQ: WBMD) had another bad week after dropping from almost $27.50 down to almost $25.00 after warning that it could face a loss for the year.  Some analysts just expect more pain or cannot take any more pain here with the stock down over 50% from its 52-week high.  S&P Capital IQ cut the rating to Strong Sell from Sell, and Raymond James cut the rating down to Market Perform from Outperform.

If you enjoyed the top analyst calls of the week, you can join our free email newsletter that includes analyst summaries each morning sent right to your inbox.  We also cover top issues such as IPOs, special financial exclusives, mergers and more. Sign up in the box below.

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JON C. OGG

Brocade Communications Systems Inc. (NASDAQ: BRCD) Reiterated Hold at Argus.
Cabela’s, Inc. (NYSE: CAB) named as value stock of the day at Zacks.
Chesapeake Energy Corporation (NYSE: CHK) Reiterated Neutral at Credit Suisse.
CNOOC Ltd (NYSE: CEO) Cut to Neutral at Credit Suisse.
Excel Maritime Carriers (NYSE: EXM) Cut to Underperform as Bear of the Day at Zacks.
Hewlett-Packard Co. (NYSE: HPQ) Reiterated Neutral at Credit Suisse.
Juniper Networks Inc. (NYSE: JNPR) Cut to Market Perform at FBR.
Level 3 Communications Inc. (NASDAQ: LVLT) Raised to Overweight at Morgan Stanley.
LM Ericsson Telephone Company (NASDAQ: ERIC) Raised to Overweight at JPMorgan.
MercadoLibre (NASDAQ: MELI) Cut to Neutral at JPMorgan.
PetroChina Company Limited (NYSE: PTR) Raised to Outperform at Credit Suisse.
Pool Corporation (NASDAQ: POOL) named Bull of the Day at Zacks.
TJX Companies Inc. (NYSE: TJX) Reiterated Hold at Argus.
VIVUS, Inc. (NASDAQ: VVUS) reiterated Outperform but raised target to $36.00 at Credit Suisse; Raised to Hold at Brean Murray.

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JON C. OGG

Amgen Inc. (NASDAQ: AMGN) Reiterated Buy and Raised target to $80 at Argus.
AON Corporation (NYSE: AON) Raised to Neutral from Underperform at Credit Suisse.
EQT Corporation (NYSE: EQT) Raised to Hold from Sell with $50 target at Canaccord Genuity.
Exelixis, Inc. (NASDAQ: EXEL) Started as Outperform at Credit Suisse.
Intrepid Potash (NYSE: IPI) Cut to Sell at Goldman Sachs.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Maintained Buy but target now at $14 from $19 at Argus.
Medivation, Inc. (NASDAQ: MDVN) Started as Outperform at Credit Suisse.
Nike Inc. (NYSE: NKE) Raised to Buy at Argus.
NII Holdings, Inc. (NASDAQ: NIHD) named as Bear of the Day at Zacks.
NYSE Euronext (NYSE: NYX) Cut to Sector Perform at RBC Capital.
Potash Corp. of Saskatchewan (NYSE: POT) Cut to Neutral at Goldman Sachs.
Rackspace Hosting Inc. (NYSE: RAX) named Momentum stock of the day at Zacks.
Range Resources Corporation (NYSE: RRC) Raised to Hold from Sell with $59 target at Canaccord Genuity.
Symantec Corporation (NASDAQ: SYMC) Reiterated Buy and $24.00 price target at Argus.
Tesla Motors, Inc. (NASDAQ: TSLA) Started as Buy at Jefferies.
Under Armour, Inc. (NYSE: UA) Raised to Buy at Needham.
UnitedHealth Group (NYSE: UNH) named as Bull of the Day at Zacks. 

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JON C. OGG

After the first half-hour of trading, Illumina is up nearly 39% at $52.35. Volume is about 6x the daily average of about 2.8 million shares traded.The genetic testing instrument maker is the target of a $5.7 billion hostile takeover offer from Roche Holdings AG.

LM Ericsson is down more than -15% at $8.68 after posting a new 52-week low of $8.67 earlier. Volume is already greater than the daily average of 4.3 million shares traded. The telecommunications company reported a huge profit drop on much weaker sales.

Corning is down nearly -10% at $13.19. Volume is already about 75% of the average daily volume of 20.5 million shares traded. The specialty glass and ceramics maker reported so-so earnings this morning, but forecast weaker prices for the year ahead.

Piper Jaffray is down more than -10% at $22.22. Volume is about 50% of the daily average of about 200,000 shares traded. The investment broker missed both earnings and revenue estimates in the fourth quarter.

Indiana Community Bancorp is up nearly 45% at $21.03, a new 52-week high. Volume is already more than 40x the daily average of just 1,700 shares traded. The bank holding company has agreed to be acquired by Old National Bancorp (NYSE: ONB) in an all-stock transaction.

Paul Ausick

Japan has its first trade deficit since 1980. (Reuters)

Yahoo! (NASDAQ: YHOO) posts weak earnings on a revenue drop. (Reuters)

International Monetary Fund’s Lagarde says that if Europe combined the ESFS and ESM rescue funds, it would raise confidence in the chance that a bailout of weak economies would work. (Reuters)

A PricewaterhouseCoopers study shows CEOs are concerned about a negative reaction to the  situation in Europe. (Reuters)

More cracks are found in the wings of Airbus A380 super jumbos. (Reuters)

Roche offers $5.7 billion to buy gene map firm Illumina (NASDAQ: ILMN). (Reuters)

The Baltic Exchange’s measure of the cost of shipping commodities plunges, an indication of a slow economy. (Reuters)

Ericsson’s (NASDAQ: ERIC) shares plunge after it said profit for Q4 dropped sharply. (Reuters)

Facebook will suspend trading in its shares for three days, but does not explain why. (Reuters)

EU executives will block an NYSE Euronext (NYSE: NYX) merger with Deutsche Borse. (Reuters)

Google (NASDAQ: GOOG) to combine information on users, which will make it harder for them to keep private. (WSJ)

Morgan Stanley (NYSE: MS) presses to lead the Facebook IPO. (WSJ)

The parent company of British Air may be part of an AMR buyout. (WSJ)

The IMF cuts its forecasts for most nations around the world. (WSJ)

AMD (NYSE: AMD) shows a loss on large write-downs. (WSJ)

The Defense Department to reveal its plans for budget cuts. (WSJ)

The PMI of many parts of Europe rises. (WSJ)

EU finance ministers press Greece and its private creditors to settle differences on refinancing. (WSJ)

General Motors (NYSE: GM) is accused of using the government bailout as the means to make the Chevy Volt. (WSJ)

McDonald’s (NYSE: MCD) quarter is driven in part by late-night food sales. (WSJ)

Del Frisco’s Restaurant Group plans to go public to raise $100 million. (WSJ)

Olympus is in talks with Sony (NYSE: SNE) to raise $1.3 billion. (WSJ)

The Avenue Capital Group will take over Quiznos as part of a debt restructure. (WSJ)

Gannett (NYSE: GCI) buys Fantasy Sports Ventures so that it can focus more on sports news. (WSJ)

Daniel Mudd, CEO of Fortress (NYSE: FIG), leaves after charges of securities fraud. (WSJ)

Morgan Stanley makes only a small number of its executives new managing directors. (WSJ)

European banks restructure to improve balance sheets, but some moves may be blocked by regulators worried the changes could hurt the financial system. (NYT)

The European Central Bank faces losses on Greek bonds that could reach 55 billion euro. (NYT)

Oil imports helped drive Japan’s rare trade deficit. (NYT)

The IMF presses the ECB to take larger losses on Greek bonds. (FT)

Citigroup (NYSE: C) may make more spending cuts in its securities group. (Bloomberg)

Douglas A. McIntyre

For the first quarter 2012, ST-Ericsson expects a very significant sequential decline in net sales, resulting from a combination of higher inventory at some of our customers, further weakening of legacy product sales, the effect of first quarter seasonality as well as the reduction, in the short term, of new product sales with one of our largest customers.

Though unnamed, Nokia is believed to be the customer ST-Ericsson is referring to here.

There is also a belief that Nokia will have to cut its rich 8.6% dividend yield as the company tries to conserve cash for the coming launch of its new smartphones using the Windows Phone 8 operating system from Microsoft Corp. (NASDAQ: MSFT). Lagging sales of the company’s cheaper feature phones aren’t helping either.

Nokia’s ADRs are down nearly -7.5% today at $5.31 in a 52-week range of $4.46-$11.75.

Paul Ausick

AstraZeneca PLC (NYSE: AZN) Cut to Underweight at JPMorgan.
BlackRock, Inc. (NYSE: BLK) Cut to Neutral at Stern Agee.
Broadcom Corp. (NASDAQ: BRCM) Reiterated Buy with $46 price target at Argus.
Constellation Energy Group, Inc. (NYSE: CEG) Cut to Neutral at Citigroup.
Consolidated Edison Inc. (NYSE: ED) Cut to Neutral at Citigroup.
eBay Inc. (NASDAQ: EBAY) Reiterated Buy with $40 price target at Argus.
LM Ericsson Telephone Co. (NASDAQ: ERIC) Cut to Neutral at Credit Suisse.
Exelon Corporation (NYSE: EXC) Cut to Neutral at Citigroup.
Google Inc. (NASDAQ: GOOG) downgraded to Hold at Benchmark; Raised targets at boutique firm Global Equities Research.
Netflix, Inc. (NASDAQ: NFLX) Maintained Underperform and cut estimates at Needham.
Nokia Corporation (NYSE: NOK) Raised to Outperform at Credit Suisse (full summary).
Pacific Sunwear of California Inc. (NASDAQ: PSUN) Raised to Buy at Janney Capital Markets.
ReneSola Ltd. (NYSE: SOL) named as the Bear of the Day at Zacks Investment Research.
SAP AG (NYSE: SAP) Raised to Neutral at BNP Paribas.
Sanofi (NYSE: SNY) Cut to Neutral at JPMorgan.
Trinity Industries, Inc. (NYSE: TRN) named as value stock of the day at Zacks.
United Parcel Service, Inc. (NYSE: UPS) Cut to Neutral at HSBC.
VIVUS Inc. (NASDAQ: VVUS) Started as Perform at Rodman & Renshaw.
VMware Inc. (NYSE: VWM) Started as Buy at Stern Agee.

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JON C. OGG