Thank you for your well thought out reply to my "ALU 2013 & 2014.
In response to your view of:
"Now, I don't know what the "threshold for public disclosure" is, but is most certainly a low dollar figure. And once again, considering that Capella is very small, and is probably not even profitable, or perhaps only barely so, there is no way they could meaningfully impact either the revenue of ALU optics, or their downstream margins in the next year or two. A 5% jump? No way. I mean that is a massive move up, simply as a result of buying a very small firm."
I googled "Public disclosure threshold for acquisitions" and as best I could make out the requirement for mandatory public disclosure of an acquisition is when the acquired company represents 20% or more of the acquiring company's revenue. I do agree Capella is probably quite small. However, with ALU's worldwide footprint and product ramping capabilities, by the end of 2013 WSS could be a significant product line--but then again, perhaps not. The impact could be anywhere between significant and hardly noticeable.
Where I do see significant margin improvement in the division is in the reduction in employee headcount. I believe this particular division is a very bloated division and headcount reduction will have a significant impact on the division's gross margin by the end of 2013.
In reflection, I do agree a 5% increase in the "Optical (Terrestrial) division's gross margin is a very big stretch and tend to think the improvement will be around 2% plus or minus a little.
In closing, my original post represent my view of "ALU at the end of 2013" under perfect circumstances. No doubt, between now and the end of the year not everything will go perfect for ALU and the macro-economic environment will undoubtedly throw Alcatel-Lucent more than one lemon.
In that regard, I have a neighbor that always thinks the glass is half empty (as is the case with so many investors), while I on the other hand always think the glass is half full. So when a lemon event happens my neighbor says: "Go long lemons", while I say: "Lets invest in lemon aid stands "Ahead Of The Crowd". ..........Tickerguy