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Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: larry pollock who wrote (3747)	1/26/2002 2:56:42 PM
From: zbyslaw owczarczyk	Read Replies (1) \| Respond to of 3891

re:Again, how could you possibly make the claim that you know that ALA will outperform SI over the next twelve months? It is my opinion and you may agree or not. Only time will tell.

To: larry pollock who wrote (3747)	1/29/2002 1:41:37 PM
From: larry pollock	Read Replies (1) \| Respond to of 3891

Alcatel seen posting 2001 loss, bleak guidance until H2 29 Jan 2002, 08:08am ET - - - - - By Catherine Bremer PARIS, Jan 29 (Reuters) - Telecoms equipment giant Alcatel is set to report its first annual loss since unleashing a bombshell on the markets in 1995, and analysts fear the industry slump which has also hit its end-year sales may not be over. Due to release end-year figures early on Thursday, Alcatel is not likely to predict an upswing in revenues and margins before mid-2002, analysts say, despite huge restructuring measures expected to have cost 2.7 billion euros in 2001. That means market are braced for a bleak first-half outlook. "Any guidance they give for the first quarter will be gloomy but I expect they will echo Ericsson and forecast a better H2 2002," said analyst David Seban-Jeantet at ABN Amro. Any indication that this year could be worse than previously thought could hit Alcatel shares hard given their recent rise. While the stock has shed 71 percent in a year, shrinking Alcatel's market capitalisation to 20.5 billion euros from 70.7 billion, it has gained 52 percent since an October low of 11.34 euros. Analysts expect fourth-quarter sales to be down 26 percent year-on-year at 6.26 billion euros, after carriers reined in spending on wireless infrastructure and Internet technology. Full-year sales would fall 7.4 percent on a proforma basis at 24.8 billion, according to a Reuters poll of 12 analysts. Still, that would mark a quarter-on-quarter rise of 12 percent, indicating Alcatel is doing better than many of its peers, which have reported sequential falls in fourth-quarter sales amid a crippling decline in demand. Alcatel (SBF:CGEP), ranked fifth globally in its industry, is seen widening its quarterly operating loss to around 247 million euros from 215 million in the third quarter and versus an 832 million euro profit in the 2000 fourth quarter. Earnings per share are seen falling to a loss of 0.27 euros, excluding exceptional items and goodwill, versus a loss of 0.49 euros in the third quarter and a 0.36 euro profit a year ago. Alcatel said in October it was headed for a net loss of five billion euros in 2001 and an operating loss of 100-200 million. The company forecast a return to profit at the operating level in 2002 as it slashes fixed costs to bring down its quarterly breakeven sales level to below five billion euros. Last year has been its worst since 1995 when Alcatel stunned investors with its first ever loss and newly appointed Chief Executive Serge Tchuruk embarked on a drastic restructuring to turn the group back to profit the following year. The question analysts want answered this week is whether the group's second bout of restructuring in a decade -- which is costing 33,000 jobs globally -- will be as effective in getting Alcatel back on the road to recovery. EYES ON DEBT, OUTLOOK If Alcatel gets good marks for anything in 2001, it will be progress in cutting debt. Analysts say asset sales and inventory reductions could have trimmed debt to below Alcatel's goal of 4.0 billion euros by end-2001 versus 4.33 billion at end-2000. Analysts fear Alcatel's first quarter sales could slip up to 20 percent, with market weakness exacerbated by comparisons with the seasonally strong fourth quarter. "Visibility is still very poor, but I expect a recovery will be led by strong subscriber growth in broadband Internet, especially in the United States, and also by rising demand in China in the second half of 2002," Seban-Jeantet said. Sweden's Ericsson (SWED:ERIC.B) reported its first annual loss on Friday but forecast a return to profit in the second half. China has become Ericsson's single-largest market and phone maker Nokia's second largest as it invests in modernising its communications infrastructure, and Alcatel has reported strong growth in China and across the Asia Pacific region. Yet spending by carriers elsewhere in the world is expected to stay weak this year and analysts are worried Alcatel may have to embark on more restructuring if the first quarter goes badly. "We believe that 2002 will see some very significant decreases in operator capex (capital expenditure), in all regions. We expect the first half of 2002 to bear the brunt of the top-line decreases for the suppliers," Goldman Sachs said in a recent research note. Alcatel's U.S. peer Lucent (NYSE:LU) said last week it believed it had passed the bottom and forecast growth from January 2002. Canada's Nortel Networks (NYSE:NT)(TSE:NT) has forecast another sequential drop in sales in the first quarter but a return to profit in the fourth. Both Nortel and Lucent have axed tens of thousands of jobs over the past year. Alcatel has given no outlook for 2002 other than to say it sees the global telecoms equipment industry down between five and 20 percent over the year, in line with analyst expectations for a 10-15 percent decrease in spending by operators. Copyright 2002, Reuters News Service