the end of LU is near Alcatel-Lucent Loss Widens as Sales Fall; Shares Drop (Update2) Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Marcel van de Hoef
Oct. 30 (Bloomberg) -- Alcatel-Lucent SA, the world’s largest supplier of fixed-line phone networks, posted a wider- than-expected third-quarter net loss as sales fell, sending its shares to their biggest drop since December.
The loss deepened to 182 million euros ($270 million), or 8 cents a share, from 40 million euros, or 2 cents, a year earlier, the Paris-based company said in a statement. That was worse than the 174.4 million-euro average loss from eight estimates compiled by Bloomberg. Sales fell 9.3 percent, also missing analysts’ estimates.
“The top line was disappointing,” said Nicolas von Stackelberg, a Frankfurt-based analyst at Oppenheim Research GmbH, who has a “neutral” rating on the stock.
Alcatel-Lucent reiterated a forecast for adjusted operating income of around break-even this year as Chief Executive Officer Ben Verwaayen cuts jobs and other costs. The company maintained its market forecast for the year, unlike rival Nokia Siemens Networks, which this month said the industry will contract less than it previously anticipated.
“Maybe some people had expected Alcatel-Lucent to follow suit and also upgrade the guidance,” said von Stackelberg.
Alcatel-Lucent shares fell 11 percent to 2.57 euros in Paris, the biggest drop since Dec. 12. The shares have gained 68 percent this year.
Market Outlook
Network-equipment suppliers have suffered as the economic slump cut demand at phone operators, who capped or postponed spending. Ericsson AB, the world’s largest maker of wireless phone networks, posted a steeper-than-expected 71 percent drop in third-quarter profit, as clients slashed spending and Chinese competition drove down prices.
The market for telecommunications equipment and related services will fall between 8 percent and 12 percent at constant exchange rates this year, Alcatel-Lucent said today, reiterating a previous forecast. Next year the market will expand by less than 5 percent, Chief Financial Officer Paul Tufano said on a call with reporters.
Nokia Siemens, a venture between Nokia Oyj and Siemens AG, expects the mobile and fixed infrastructure and related services markets to decline by about 5 percent in euro terms this year, revised from a previous guidance for a 10 percent drop, Nokia said on Oct. 15.
Sales Decline
In the latest quarter, Alcatel sales fell to 3.69 billion euros. Analysts had predicted sales of 3.88 billion euros, the average of 16 estimates.
“Investors are looking for Alcatel to grow margins,” said Stuart Jeffrey, an analyst at Nomura who has a “neutral” rating on the stock. “If revenues keep disappointing it’s harder for them to meet or beat expectations.”
The company said it achieved 80 percent of its goal to reduce annual expenses by 750 million euros this year.
Alcatel-Lucent, which lost more than 8.5 billion euros since Alcatel SA bought Lucent Technologies Inc. in 2006, is in talks about the future of a number of non-core assets and one divestiture is in its “late stages,” Tufano said on the call.
To contact the reporter on this story: Marcel van de Hoef in Amsterdam at mvandehoef@bloomberg.net |
