Alcatel Shares Fall on Concern Over 2nd-Qtr Earnings (Update1)
By Molly Schuetz
Paris, July 25 (Bloomberg) -- Alcatel SA shares fell to their lowest level in almost three years on concern that Europe's fourth- largest telecommunications equipment maker will report a second- quarter loss tomorrow, investors said.
The shares fell 78 cents, or 4.41 percent, to 16.91 euros ($14.89), extending yesterday's 3.5 percent decline. The shares were last at this level in October 1998.
The company said in May it would have a second-quarter loss of 3 billion euros after taking a one-time charge for the declining value of some investments. This is the first time the company will report a loss since 1995.
``We are extremely worried,'' said Jerome Forneris, who helps manage 2.3 billion euros at Banque Martin Maurel, including Alcatel shares. ``We expect an important loss and operating profit below expectations.''
Alcatel will probably report earnings before income and taxes of 102 million euros for the second quarter, excluding Nexans SA, which was listed on the stock market in June, according to the average estimate of three analysts polled by Bloomberg News. Analysts expect sales, excluding Nexans, of 6.474 billion euros, down 1.7 percent from last year.
Telecommunications equipment makers have suffered as phone operators delay purchases to pay off debt accrued in bidding for new wireless licenses. Alcatel's shares have fallen 70 percent so far this year, compared to a 59 percent drop in the Bloomberg Europe 500 Telecom Equipment Index.
Rival Siemens AG reported earlier today an unexpected third- quarter loss of 489 million euros in the second quarter, excluding one-time items and a loss at Infineon Technologies AG, its chipmaking unit. Chief Executive Heinrich von Pierer said he also expected lower full-year earnings.
Lucent Technologies Inc., the biggest U.S. maker of telephone equipment, said yesterday that it will cut 20,000 more jobs and take a charge of as much as $9 billion as its third-quarter loss widened and sales fell.
Alcatel reports earnings before the Paris market opens tomorrow. |
