Despite Cube Flop, Still Hold Apple

Also: analysts' opinions on Lucent, Alcatel and other stocks

Apple Computer (AAPL ): Maintains 3 STARS (hold)

Analyst: Megan Graham-Hackett

Apple announced that it will suspend production of its G4 cube personal computer indefinitely. While the company holds out hope that it may reintroduce an upgraded version in the future, it stated that it has no current plans to do so. S&P views the discontinuation of G4 as a positive for Apple since sales had been disappointing. The product was introduced with great fanfare but failed to attract a sizeable customer base at it aimed at middle ground between consumer and professional users. S&P expects Apple to take some kind of one-time charge related to this action. S&P will make no change to its estimates on Apple.

Lucent Technologies (LU ) and Alcatel (ALA ): Maintains 3 STARS (hold) on both

Analysts: Ari Bensinger, Scott Kessler

Published reports indicate Lucent will receive a lower-than-expected amount for its fiber unit. The French newspaper La Tribune reported Alcatel would offer $3 billion cash for Lucent's fiber-optic cable unit, less than the $4 billion offered originally and prior estimates of up to $8 billion. The lower offer price would not be surprising given the massive global slowdown in demand for telecom equipment. Still, $3 billion would be a welcome cash infusion for troubled Lucent. Because weak-end markets are greatly priced into both Lucent and Alcatel, the shares remain "hold." /

General Motors (GM ): Maintains 3 STARS (hold)

Analyst: Efraim Levy

The company reported 3% lower June vehicle sales. Cars were down 13%, but trucks were up 9%. Light truck performance was strong, especially in utility vehicles. Industrywide, incentives were up, helping to offset a weak domestic economy. S&P is raising its industry light vehicle sales forecast by about 100,000 units to 16.6 million units. Despite generally better-than-expected sales by domestic brands, S&P expects foreign brands to have again taken market share, especially in the light truck category.

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