Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: larry pollock who wrote (3752)	1/31/2002 6:33:41 AM
From: larry pollock	Read Replies (1) \| Respond to of 3891

Alcatel sees weak Q1 sales after 2001 loss (UPDATE: Adds details from conference call, Optronics results) By Catherine Bremer PARIS, Jan 31 (Reuters) - Telecoms equipment giant Alcatel plunged into the red in 2001 for the second time in its history with a 4.96 billion euro net loss, and signalled on Thursday the current industry downturn would bite for several months to come. ADVERTISEMENT However, Alcatel shares jumped as much as 6.9 pecent to 18.4 euros after the company announced substantially lower debt and forecast a pick-up in sales from the second quarter. It also expects a return to operating profit in 2002. Alcatel, ranked fifth globally among its peers, reported a 20 percent year-on-year slide in fourth quarter sales to 6.77 billion euros, dragging it down to a 368 million euro operating loss versus an 832 million profit a year earlier. The net loss was in line with a profit warning by Alcatel in October. Fourth quarter sales were above market expectations -- marking a 20 percent increase on the third quarter -- but the operating loss was steeper than analysts had forecast. Alcatel's miserable bottom line -- its worst since it dropped a bombshell in 1995 with an unexpected annual loss -- echoes those of rivals like Swedish Ericsson , Canada's Nortel Networks (Toronto:NT.TO - news)(NYSE:NT - news) and U.S. Lucent (NYSE:LU - news). Equipment makers have borne the brunt of a cash crisis among telecoms operators, whose rash spending on external growth and new technology in recent years has left them with huge debt and little money to spend on new infrastructure. Alcatel, which announced some 33,000 job cuts last year to try to soften the blow from sliding demand for telecoms infrastructure, said it expected first-quarter sales to decline around 30 percent from the fourth quarter. However, it predicted that sales would start rising quarter-on-quarter from the second quarter and that it would show a full-year operating profit in 2002. It made an operating loss of 361 million euros in 2001. ``We expect 2002 to remain challenging. The first quarter will be weak with market softness compounding the usual seasonal effect,'' CEO Serge Tchuruk said. ``Income from operations should be essentially unchanged sequentially by virtue of reduced costs and the non recurrence of exceptional charges in Q4,'' he said. DEBT SLASHED, CASHFLOW POSITIVE Earnings per share slid to a 1.28 euro loss in Q4 versus a 0.36 euro profit a year earlier, reflecting hefty restructuring charges that totalled 2.12 billion euros over the full year. But the rise in turnover from the third quarter contrasted with many rivals who have reported sequential declines. ``Alcatel has released in-line figures for net earnings, maybe a little disappointing for the operating. The first quarter will still be a little difficult but the group thinks things will improve from the second,'' said a Paris trader. Markets also cheered a drastic reduction in Alcatel's net debt to 2.66 billion euros, making a debt to equity ratio of 27 percent, beneath its 4.0 billion goal, as it generated positive operating cashflow of 2.0 billion euros in the fourth quarter. Alcatel said it was targeting an extra one billion euros reduction in operating working capital, further reducing its net debt, and continued positive cash flows in 2002. ``We are trying to do two things (for 2002); reduce costs and keep improving our financial situation to be in the best possible position when the recovery comes,'' Alcatel number two Jean-Pierre Halbron told analysts in a conference call. ``We hope that will be somewhere in the second half.'' Analysts polled by Reuters had forecast a fourth quarter operating loss of 247 million euros versus an 832 million euro profit year earlier, a loss per share of 0.27 euros and quarterly sales of 6.26 billion euros. Alcatel said in October it would endeavour to return to profit at the operating level in 2002 by slashing costs to bring its quarterly breakeven sales level below five billion euros. Majority-owned optical components unit Alcatel Optronics posted a fourth-quarter net loss of 165 million euros as it had already forecast. It too has announced steps to clean up its balance sheet. Optronics shares rose two percent.