Can Alcatel Lucent (NYSE:ALU) Hold Fast After Surge?
Right after we last covered Alcatel Lucent (NYSE:ALU), the company caught a nice boost in the following two sessions, gaining 4.7% and 4.5%. After the two green days, ALU closed 1% down in yesterday’s session, managing to hold its ground.
The surge in price was attributed by some to the success of Ciena Corporation (NASDAQ:CIEN). The network hardware company with a market cap of just over $2 billion announced Q2 results that outpaced expectations in both EPS and revenues that managed to pop above half a billion. The company also issued strong guidance for the current quarter, setting its revenue target $20 million ahead of the analyst consensus.
This immediately sent CIEN on a bullish run and the price went up 17% last Thursday. This move probably sent ripples through the entire sector and Alcatel piggy-backed the surge. ALU stock managed to push its way into a new one-year high, after a very good run in late May and early June.
There has been educated speculation that as a third of CIEN‘s revenue came from two unnamed major clients, likely AT&T (NYSE:T) and Verizon Comm. Inc. (NYSE:VZ), Alcatel could potentially stand to gain from the news, as ALU is the party who will be building AT&T‘s LTE network.
Alcatel did log yearly loss last year, after a huge drop in earnings sent it on the wrong side of the bottom line. It remains to be seen how successful the company is with its restructuring plan that should help it contain expenses to a sufficient degree.