Lucent's chart depicts that its historical OPS has been volatile. Item A shows lucent had three consecutive quarters of negative OPS(red) and positive EPS (black) beginning with Q4 1998. Item B shows four consecutive quarters of positive OPS(green) beginning with Q3 1999. Item C shows Lucent's positive OPS pattern breaks to negative OPS (red) in Q3 2000 with its shares closing at $42.00. From Q3 2000 to Q2 2002 Lucent's reports negative OPS(red) for 7 out of 8 quarters. Item D depicts, a negative pattern break to positive OPS(green) in Q3 2002 with its shares closing at $1.50

Be concerned when large companies such as Lucent or Agilent begin to generate consecutive quarters of negative OPS. Large companies, unlike small ones, generally have depreciable assets that generate substantial cash flow. They also have the latitude and should have the discipline to significantly cut operating expenses to conserve cash (large layoffs, etc.) as they go from generating a net profit to a loss. Cisco Systems, Inc., (NASDAQ: CSCO) is a good example of a large company that cut its costs so that it could maintain positive OPS.