NEW YORK (CNN/Money) - Every time you think it's safe to say that the news can't get any worse for telecom, it does. It's almost comical now...if you're into gallows humor.

Fiber optic equipment company JDS Uniphase was the latest to disappoint; on Monday it cut its sales outlook for the current quarter. That helped contribute to a sector wide sell-off, with Corning, Lucent and Nortel getting whacked. Each stock fell at least 4.5 percent.

During their heydays, Lucent and Nortel and JDS each had a market capitalization of more than $200 billion while Corning's was above $100 billion at its peak. Now, the combined value of all four companies is about $11 billion. JDS trades at $1.87 a share and Corning at $1.75. Lucent is just below a buck. Nortel is trading at 67 cents.

Is there any hope? Lucent and Nortel, which sell networking equipment to long-distance, local and wireless carriers, have been hit hard since their customers have drastically cut back on spending after overbuilding in the late 1990s. And JDS and Corning have been crushed as well since they supply equipment, such as fiber and pump lasers, to networkers like Lucent and Nortel.

Still, the low share prices have enticed some value managers -- Legg Mason's Bill Miller bought more shares of Lucent in the second quarter and San Francisco-based investment firm Dodge & Cox recently acquired an 11 percent stake in Corning, for example.

Research telecom equipment stocks Corning JDS Uniphase Lucent Nortel

But others are not convinced that these stocks are worth the risk. "They may be deep values right now but there's so much uncertainty that owning them right now is a gamble," says Adam Adelman, an analyst with Philippe Investment Management, a money management firm based in New York. Adelman does not own any shares of Lucent, Nortel, JDS or Corning.

Patricia Lee, an analyst with fixed income research firm CreditSights, agrees. "There's a lot of overcapacity and capital expenditures spending is still coming down," Lee says.

One thing in these companies' favor is relatively healthy cash positions, which should help them at least survive through the downturn. But since they are expected to lose money this year and next (analysts don't expect Lucent and Nortel to break even until fiscal 2004), there is cause for concern now.

Lee says that Nortel, which had $4.9 billion in cash as of June 30, is in the most dire straits. She estimates the company will burn through $2 billion of its cash within the next 12 months and has little hope of raising more funds through the public markets. In addition, Nortel still has $4.1 billion in long-term debt. A Nortel spokeswoman said the company would not speculate on how much it plans to spend within the next 12 months.

Lucent, meanwhile, had $5.4 billion as of June 30 and Lee projects it will run through $750 million to $1 billion within the next year. It has $3.2 billion in long-term debt. "We have the liquidity to fund a turn-around and survive this long winter in telecom," Lucent spokesman Frank Briamonte says.

Looking at the fiber optics component companies that supply networking firms like Nortel and Lucent, JDS Uniphase burned through $360 million in cash during the past 12 months and had about $1.5 billion as of June 30. One factor in its favor is that it is nearly debt-free, with just $6.8 million in debt on its books.

Corning, on the other hand, has burned through $900 million since the end of 2001 and as of June 30 had just $1.3 billion left and $4.3 billion in debt. The company did raise $500 million in July, however, through an offering of convertible preferred stock, which eased some liquidity concerns.

Lee says consolidation might be the only answer to the sector's woes. As long as the stock market remains in a funk, there's little chance of any of the companies raising more money through equity or debt offerings. But if companies merge, they could have a better chance of surviving, she says.

However, given all the problems in the sector, it would seem that Wall Street would frown on any company that made an acquisition. Plus, very few companies have a strong enough stock price to make a deal tantalizing or enough cash to pull one off either.

French networking company Alcatel had been a rumored buyer of Lucent back in 2000 but it too has seen its fortunes dry up and stock price plummet. The company announced 23,000 layoffs on Friday and its stock has plummeted 86 percent year to date. Ciena, Tellabs and Juniper Networks all have suffered as well, with each stock down at least 70 percent this year. That leaves Cisco, and Adelman says he does not think that company will want or need to buy any of its struggling competitors.

Chuck Thomas, senior managing analyst with Dreyfus, says that since so many companies in the sector are reeling, prospective buyers would be better off waiting for competitors to declare bankruptcy anyway instead of buying now. There has yet to be a prominent networking company to file for Chapter 11, but Thomas thinks that will happen since he does not expect the telecom sector to stabilize until 2004. Dreyfus does not own shares of Lucent, Nortel, JDS Uniphase or Corning.

So even though it may be hard to believe that telecom equipment stocks can head any lower, Adelman thinks they can. "These stocks could easily get cut in half again," he says.