When Alcatel and Lucent agreed to merge in April 2006, there were the typical phrases in the press release: "new growth opportunities," "cost synergies," "global convergence," "increased scale," "global capabilities" and so on. Oh, and yes, it would "create enhanced value for shareholders."

Yet, there was something that was curious. The CEO of the new entity, Patricia Russo, said she would not learn French, even though Alcatel was based in France. Might this be a sign that there would be some cultural issues?

Alas, the fact remains that the benefits of the deal haven't materialized as Alcatel-Lucent's (NYSE: ALU) stock price has gone from $14.50 to $7.50.

Well, this week, Alcatel-Lucent had its annual meeting. No doubt, it wasn't fun as shareholders provided an earful. After all, the company had to write down $4.55 billion in asset value because of the merger (there were also thousands of layoffs).

Interestingly enough, shareholders passed a resolution that allows Alcatel-Lucent's board to rid its chairman/CEO with a majority vote instead of a two-thirds of a vote.

Unfortunately, I don't see this amounting to much. Keep in mind that -- with consolidation of wireless carriers -- its tough for equipment providers to get any leverage. Plus, the competition is still intense.

By the way, Russo apparently is learning to speak French now. And she even spoke some words at the meeting. However, she will need to learn a more important language: profits.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

MOST NOTEWORTHY: RadioShack (RSH), Weyerhauser (WY), Goodyear Tire (GT), Hot Topic (HOTT) and Unilever (UL, UN) were today's noteworthy downgrades:

• Citigroup downgraded RadioShack (NYSE: RSH) to Sell from Hold on valuation as they believe shares have priced in a more aggressive top-line recovery than the company can deliver over the next 12 months and that margin improvement is likely to slow.

• Merrill downgraded Weyerhauser (NYSE: WY) to Neutral from Buy based on the tighter credit environment and the impact on a potential containerboard divestiture or merger.

• Matrix downgraded shares of Goodyear Tire (NYSE: GT) to Sell from Hold to reflect rising oil prices and negative fundamental trends.

• AG Edwards downgraded Hot Topic (NASDAQ: HOTT) to Sell from Hold to reflect negative performance momentum and a lack of back-to-school prospects.

• Credit Suisse downgraded Unilever (NYSE: UN, UL) to Underperform from Neutral as their analysis suggests the company continues to lose market share...

OTHER DOWNGRADES:

• Baird cut Franklin Electric (NASDAQ: FELE) to Underperform from Neutral.

• Bear Stearns downgraded Kyphon (NASDAQ: KYPH) to Peer Perform from Outperform.

• Jarden (NYSE: JAH) was cut to Neutral from Buy at Goldman.

• Citigroup downgraded PetroChina (NYSE: PTR) to Hold from Buy.

• Alacatel-Lucent (NYSE: ALU) was downgraded to Neutral from Buy at Goldman.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Whirlpool Corp (WHR), Amazon.com, Inc (AMZN), Arkansas Best Corp (ABFS) and Capital One Financial Corp (COF) were today's more noteworthy upgrades:

• Citigroup upgraded Whirlpool Corp (NYSE: WHR) to Hold from Sell with a $107 target after better-than-expected Q1 results.

• Amazon.com Inc (NASDAQ: AMZN) was upgraded to Market Perform from Underperform at Piper Jaffray, to Hold from Sell at Citigroup, to Neutral from Underperform at Cowen, to Sector Perform from Underperform at Pacific Crest and to Buy from Hold at BWS Financial.

• Elsewhere, Stephens raised Arkansas Best Corp (NASDAQ: ABFS) to Equal Weight from Underweight with a $30 target.

• Bernstein upgraded Capital One Financial (NYSE: COF) to Outperform from Market Perform...

OTHER UPGRADES:

• Key Bank Capital Markets upgraded Cheesecake Factory Inc (NASDAQ: CAKE) to Buy from Hold.

• Alcatel-Lucent (NYSE: ALU) was upgraded to Buy from Neutral at Goldman.

• Stifel upgraded Advance Auto Parts, Inc (NYSE: AAP) to Buy from Hold with a $48 target.

• UBS raised Yamana Gold Inc's (NYSE: AUY) rating to Neutral from Reduce.

• Longbow Research upgraded Parker Hannifin (NYSE: PH) to Buy from Neutral.

• Lehman upgraded American Standard Cos (NYSE: ASD) to Buy from Hold with a $50 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: UnitedHealth Group Inc (UNH), Aetna Inc (AET), Hercules Inc (HPC) and Alcatel-Lucent (ALU), were today's noteworthy initiations:

• Jefferies started UnitedHealth Group inc NYSE: UNH) with a Hold rating and $48 target and said near-term risk is still present due to unfavorable reserve adjustments to the company's commercial risk business and high expectations for improvement in the company's commercial medical care ratio.

• Aetna Inc (NYSE: AET) was also initiated by Jefferies with a Hold rating based on valuation.

• Credit Suisse started Hercules Inc (NYSE: HPC) with an Outperform rating and $24 target.

• Matrix USA initiated Alcatel-Lucent (NYSE: ALU) with a Hold rating on valuation...

OTHER INITIATIONS:

• Cowen is positive on MIPS Technologies, Inc (NASDAQ: MIPS), starting the company with an Outperform rating, and expects a deal with Microchip Technology Inc (MCHP) to be announced soon.

• JP Morgan initiated shares of Headwaters Inc (NYSE: HW) with a Neutral rating.

• Needham assumed coverage of Harris Interactive Inc (NASDAQ: HPOL) with a Hold rating.

• ThinkEquity started Aruba Networks, Inc (NASDQ: ARUN) with an Accumulate rating and $15 target.

• Lazard initiated shares of Cyclacel Pharmaceuticals Inc (NASDAQ: CYCC) with a Buy rating and $11 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Some of the more notable downgrades today include Alcatel-Lucent (ALU), AstraZeneca plc (AZN), GlaxoSmithKline plc (GSK) and Motorola, Inc (MOT):

• Goldman Sachs downgraded shares of Alcatel-Lucent (NYSE: ALU) to Neutral from Buy on integration issues, as the firm does not expect a sales recovery before Q3.

• JP Morgan cut both AstraZeneca plc (NYSE: AZN) and GlaxoSmithKline plc (NYSE: GSK) to Underweight from Neutral on valuation.

• RBC downgraded Motorola Inc (NYSE: MOT) to Sector Perform from Outperform; following Motorola's pre-announcement, the firm expects shares to trade sideways for the balance of the year.

OTHER DOWNGRADES:

• Bank Of America downgraded Aeropostale, Inc (NYSE: ARO) to Neutral from Buy with a $42 target based on valuation.

• RF Micro Devices, Inc (NASDAQ: RFMD) was cut to Sector Perform from Outperform at CIBC citing the risk from Motorola; the firm believes RFMD's story outside of Motorola remains strong and consistent but sees downside to FY08 targets given MOT's contribution to RFMD's top line.

• Raymond James downgraded Yamana Gold Inc (NYSE: AUY) to Outperform from Strong Buy. UBS also downgraded Yamana to Reduce from Neutral.

• Citigroup cut Allegheny Energy, Inc (NYSE: AYE) to Hold from Buy with a $53 target.

• Lehman downgraded International Rectifier Corp (NYSE: IRF) to Equal Weight from Overweight and a $40 target.

• Raytheon Co (NYSE: RTN) was downgraded to Sell from Neutral at Goldman based on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Research in Motion Ltd (RIMM), BE Aerospace Inc (BEAV) and Burger King Holdings (BKC) were some of today's more notable initiations.

• JMP Securities started Research in Motion Ltd (NASDAQ: RIMM) with a Market Perform rating as the firm has concerns about RIMM's enterprise-focused prospects in the hits driven, high-end consumer market.

• Wachovia initiated BE Aerospace Inc (NYSE: BEAV) with an Outperform rating, expecting significant growth in its core businesses.

• AG Edwards started Burger King Holdings (NYSE: BKC) with a Buy rating and $25 target. The firm believes Burger King has improved fundamentals and robust future earnings potential after years of turnaround efforts.

OTHER INITIATIONS:

• Raymond James initiated AnnTaylor Stores (NYSE: ANN) with an Outperform rating, Urban Outfitters (NASDAQ: URBN) with a Strong Buy rating and Charlotte Russe Holding (NASDAQ: CHIC) with a Market Perform rating.

• Caris started Medtronic, Inc (NASDAQ: MDT) with a Buy rating and $61 target.

• ThinkEquity initiated Gaming Partners International (NASDAQ: GPIC) with a Buy rating.

• Morgan Stanley initiated Alcatel-Lucent (NYSE: ALU) with an Equal-Weight rating.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MAJOR PAPERS:

• The Wall Street Journal (subscription required) reported that Microsoft Corp (NASDAQ: MSFT) has been ordered to pay $1.52B to Alcatel-Lucent (NYSE: ALU) for infringing patents on a fundamental technology for digital music.
• According to the Wall Street Journal's "Heard on the Street" column, shares of India's two largest private sector banking companies, Icici Bank Ltd. (NYSE: IBN) and HDFC Bank (NYSE: HDB), have tripled over the past three years. However, some investors are getting cautious on the stocks as India's central bank has taken tougher steps to rein in lending growth and stanch inflation.
• Barron's Online's (subscription required) "Weekday Trader" suggested investing in companies with modest dividend yields, but a strong cash position and business model, such as outsourcing player Paychex, Inc. (NASDAQ: PAYX), fast-food giant McDonald's Corp. (NYSE: MCD) and insurer Prudential Financial, Inc. (NYSE: PRU).

OTHER PAPERS:

• According to German website Heise Online, Apple Inc (NASDAQ: AAPL) will exhibit at CeBIT, the European version of the CES expo, from March 15 through the 21. Apple will be exhibiting the iPhone, said the site. However, according to German website Computerwoche, Apple has denied that it is participating in CeBIT. (Both links in German)
  
• Business Week's "Inside Wall Street" column mentioned UnitedHealth (NYSE: UNH), Epix (NASDAQ: EPIX) and LJ International (NASDAQ: JADE) positively.
  
• Warren Buffet has stirred up interest in UnitedHealth by reportedly buying one million shares in the company.
• Small biotech Epix, which recently signed a deal with GlaxoSmithKline (NYSE: GSK), could double within a year, believe some experts.
• LJ International, which has already risen from slightly over $4 to over $11 since December, may still have room to rise, according to Albert Lee of Maxim Group, who has a $12 price target on the stock.
• Investor's Business Daily's "New America" column highlighted Spartan Stores (NASDAQ: SPTN), the 10th largest grocery distributor in the U.S., which has seen earnings growth in double and triple digits for nine of the past ten quarters.

MOST NOTEWORTHY: XM Satellite Radio Holdings Inc (XMSR), Sirius Satellite Radio Inc (SIRI) and Pediatrix Medical (PDX) were today's most notable initiations:

• Wedbush initiated XM Satellite Radio Holdings Inc (NASDAQ: XMSR) with a Hold rating and $15 target, expecting a few tough quarters due to market share loss.
• Wedbush also initiated shares of Sirius Satellite Radio Inc (NASDAQ: SIRI) with a Buy rating and $5 target. The firm believes Q4 subscriber tallies suggest market share gains to over 60% in retail channels.
• Pediatrix Medical (NYSE: PDX) was initiated with a Top Pick rating and $60 target at RBC. The firm believes Pediatrix could experience accelerating growth over the next several years due to adding anesthesiology to its core newborn franchise.

OTHER INITIATIONS:

• Rochdale initiated Maxwell Tech Inc (NASDAQ: MXWL) with a Buy rating and $20 target.
• AG Edwards started Genentech Inc (NYSE: DNA) with a Hold rating, as the firm believes shares are fairly valued.
• Trump Entertainment Resorts Inc (NASDAQ: TRMP) was started with a Buy rating at Goldman Sachs.
• Deutsche Bank initiated Ariba Inc (NASDAQ: ARBA) with a Buy rating and $12 target.
• Alcatel-Lucent ADS (NYSE: ALU) was initiated with a Peer Perform at Bear Stearns.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MAJOR PAPERS:

• The Financial Times (subscription required) wrote that Citigroup Inc (NYSE: C) has shaken up its top management structure, giving senior status to executives outside New York in a move to recognize the bank's growth prospects abroad.
• Barron's Online's (subscription required) "Weekday Trader" was positive on Teva Pharmaceutical Industries ADS (NASDAQ: TEVA), writing that despite challenges in 2007, the company could win back its crown.

OTHER PAPERS:

• The Globe and Mail reported that DaimlerChrysler AG's (NYSE: DCX) Chrysler Group will eliminate 20%, or 2,000, of its 10,000 jobs in Canada.
• According to French paper Les Echoes (in French), Alcatel-Lucent ADS (NYSE: ALU) is expected to announce 12,000-13,000 job cuts, or more than 15% of its work force.
• Technology website CNet.com reported that Microsoft Corporation (NASDAQ: MSFT) will release Windows 6, the latest software for powering mobile phones, on Monday.
• Investor's Business Daily's "New America" column was positive on bed manufacturer Tempur-Pedic International Inc (NYSE: TPX), which makes visco-elastic foam mattresses. The company has been able to stay in front by doubling its R&D and increasing its ad spending.

Of all the boom stocks from the 1990s, Cisco Systems Inc (NASDAQ: CSCO) is the only one that has maintained the stellar growth:

• Sales up 27%, the fastest stand-alone growth in years. Way above Cisco's long-term growth objective of 10 to 15%
• $2.1 billion in net income, up 28%
• Cash flow from operations of $2.7 billion
• Cisco has $20.7 billion in cash and repurchased 121 million shares for a total purchase of $3.3 billion
• Gross margins stayed strong at 65%

Stand-alone service provider orders are up big, clearly suggesting that the old-time telcos continue to move away from Alcatel-Lucent-type stuff to pure IP technology. Alcatel-Lucent ADS's (NYSE: ALU) results were awful.

Chambers said business remains strong. Most analysts expected Cisco to show signs of slowing growth, however, it is hard to find. While it is tough to chase Cisco's stock after such strong performance, its business remains strong. Chambers continues to do one of the most amazing corporate management jobs in US business history.

MOST NOTEWORTHY: Level 3 Communications (LVLT) and the Machinery Sector were the most notable initiations today.

• Credit Suisse initiated Level 3 Communications (NASDAQ: LVLT) with an Outperform rating and $7.50 target; the firm expects Level 3 to continue to benefit from strong demand for higher data usage.

• Morgan Stanley initiated the Machinery Sector with an In-Line rating.
  
• Within the sector, Deere & Co (NYSE: DE) was started with an Overweight rating and $116 target, Terex Corp (NYSE: TEX) with an Equal Weight rating and $67 target, and Caterpillar Inc (NYSE: CAT) & Agco (NYSE: AG) with Underweight ratings and targets of $52 & $25 respectively.

OTHER INITIATIONS:

• Baird initiated Alcatel-Lucent ADS (NYSE: ALU) with a Neutral rating and $15 target citing valuation and integration risks.

• Ferris Baker Watts initiated Navigators Group (NASDAQ: NAVG) with a Sell rating and $43 target; the firm said Navigators' balanced growth will serve to reduce underwriting/EPS volatility when the next highly active catastrophe season surfaces.

• Prudential initiated Allergan Inc (NYSE: AGN) with an Overweight rating and $138 target; the firm expects 2007 to be another strong year driven by medical aesthetics products acquired from Inamed in last year.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

The Financial Times of London has an interesting article about how the leadership in telecom technology is moving out of the U.S.. With the old Bell Labs, which became, Lucent, merging with French firm Alcatel to create Alcatel-Lucent (NYSE:ALU) and Chinese companies building high tech switches and routers, the U.S. seems to be running behind.

The FT wants to make the case that "the next generation of ideas is coming more from London, Seoul, and Brussels." Nice theory. No evidence.

The revolution in WiMax is being lead by Motorola Inc. (NYSE:MOT) and Intel Corp. (NASDAQ:INTC). WiMax pioneer, Clearwire, is U.S. based. Qualcomm Inc. (NASDAQ:QCOM) has its problems, but it is still the leader in global cell phone chip technology. Its rivals, Texas Instruments (NYSE:TXN) and Broadcom Corp. (NASDAQ:BRCM) are here.

The king of global routing, Cisco Systems Inc. (NASDAQ:CSCO), is based in the U.S.. Juniper Networks (NASDAQ:JNPR) is still in the U.S., until someone from overseas buy it. By the same token, a U.S. company like Motorola could buy Canadian telephone tech company Nortel Networks Corp. (NYSE:NT).

I think by now it's clear I disagree with the Financial Times of London. I also think I've made my case!