Alcatel Seen Posting Fourth-Quarter Loss of EU319 Mln: Outlook
By Molly Schuetz
Paris, Jan. 29 (Bloomberg) -- The following is a fourth-quarter earnings outlook for Alcatel SA, Europe's fourth-largest phone- equipment maker.
Expected Earnings:
Alcatel is expected to report an operating loss of 319 million euros ($276 million), compared with an operating profit of 832 million euros in the year-earlier period, according to the average estimate of six analysts surveyed by Bloomberg News. Estimates ranged from a loss of 200 million euros to a loss of 650 million euros.
Sales are seen having slumped by a third to 6.5 billion euros from 9.7 billion euros
Time:
The company is scheduled to report on Thursday at 8:00 a.m. Paris time.
Behind the Numbers:
Alcatel Chief Executive Officer Serge Tchuruk, who in May failed in a bid to buy Lucent Technologies Inc., in October predicted a fourth-quarter operating loss ``similar'' to the 215- million-euro loss posted in the third. He also forecast a full-year loss on that basis of between 100 million euros and 200 million.
Paris-based Alcatel and rivals such as Siemens AG, Ericsson AB and Nortel Networks Corp. were hurt last year as slower economic growth prompted phone companies cut equipment spending to trim debt. Sales also slowed as network capacity outstripped demand.
Alcatel, which is expected to report its third successive quarterly loss, may post a full-year net loss of 5 billion euros, its biggest ever, the company said in October.
Tchuruk is now paring costs by a fifth to be able to break even on quarterly sales of less than 5 billion euros. He is also slashing 33,000 jobs, or about a third of the workforce, and selling nearly half of the company's factories.
The outlook for this year isn't much better. Tchuruk has said he expects the equipment market to decline from 5-to-20 percent. Motorola Inc. and Ericsson have both forecast a 10 percent drop industry wide for wireless network sales in 2002.
What the Experts Say:
``It's hard to see the market getting better, so I imagine there will be more cost-cutting,'' said Susan Anthony, an analyst with Credit Lyonnais Securities, which rates the shares ``reduce.''
``I'm not sure if they can cut (costs) more, they've already cut so much there's hardly anything left,'' said Theo Kitz, an analyst at Merck, Finck & Co., which rates the shares ``market perform.''
Stock Performance:
Alcatel shares have fallen more than 70 percent in the past year, compared with a 52 percent decline in the Bloomberg Europe Telecommunication Equipment Index. The stock is the worst performer on the Dow Jones Euro Stoxx 50 Index over the past year.
Previous Market Reaction:
Alcatel shares rose 1.07 euros, or 6.8 percent to 16.77 euros on Oct. 31 after the company said it will eliminate an additional 10,000 workers in Europe and forecast the record full-year loss. |
