Alcatel pares losses as Lucent gloom lifts
By Sophie Walker
PARIS, Jan 7 (Reuters) - Shares in telecoms equipment firm Alcatel fell on Friday amid concern about U.S. peer Lucent's profit warning, but later reduced losses as analysts said Lucent's problems did not affect its market.
By 1015 GMT Alcatel was down 2.36 percent at 206.5 euros, after tumbling more than six percent to a session low of 197 euros in early trade. The blue-chip CAC-40 index showed a gain of 1.4 percent at that time.
''Lucent's statement is stock specific and I don't think there are any general industry trends to worry about. The fact that both Alcatel and Ericsson have confirmed their full-year 1999 targets are testament to that,'' said one analyst at a large international brokerage.
Lucent said on Thursday it expected first quarter profits to fall below Wall Street's expectations on flat revenue growth due to delays in some customers' purchasing plans and manufacturing constraints.
The company's shares dropped more than nine points in after-hours trading after falling 3-9/16 during the day.
''Basically Lucent have missed a trick -- I agree with the fact they have procurement issues but what they didn't say is that they are facing increased competition from Europe, from companies like Alcatel and Marconi,'' the analyst said.
Alcatel said it had no concerns about its 1999 performance despite Lucent's warning. The company, which reports full-year results in February, said in September it expected '99 operating profit of 1.2 billion euros against 997 million the prior year.
Another analyst said Alcatel's fall was exaggerated given Lucent's situation and noted contagion throughout the sector.
''It's an internal problem for Lucent, they have production problems not issues with the overall market and Alcatel is just suffering from contagion,'' said one analyst.
''Lucent is bound to fall again when the U.S. market opens, but Cisco and Nortel may recover and that would be good for Alcatel.''
''I'm not too worried,'' added a senior trader. ''Alcatel is six times less expensive than Lucent and I'm sure this is just an early sympathy pang which will not last.''
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