Alcatel-Lucent loss sparks shares plunge
By Emma Vandore |
May 7, 2010, Friday
|
Print Edition
Print Edition
SHARES in Alcatel-Lucent SA plunged on Wednesday after the telecommunications equipment maker reported a bigger-than-expected 515 million euros (US$665 million) net loss for the first quarter.
The loss was 28 percent wider than the 402 million euros loss booked in the same period last year. Revenue fell 9.8 percent to 3.24 billion euros.
Spooked investors sent shares 11.15 percent lower to 2.01 euros in Paris morning trading.
The Paris-based company said a components shortage held back sales, which Chief Executive Ben Verwaayen said was an "industrywide issue."
He said telecoms equipment makers were competing with auto makers and consumer electronics firms for some of the more basic parts.
"We were not able to fully satisfy customer demand for our products due to tightening components availability," he said. "This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company."
Looking ahead, Alcatel-Lucent said demand for telecommunications equipment and services is recovering, though its supply chain is still struggling with tight capacity.
Verwaayen kept his expectations for the full year unchanged and said he sees a recovery in the North American market.
Alcatel-Lucent aims to reach an adjusted operating margin between 1 and 5 percent this year.
Verwaayen introduced a three-year turnaround cost-cutting plan last year.
The loss was 28 percent wider than the 402 million euros loss booked in the same period last year. Revenue fell 9.8 percent to 3.24 billion euros.
Spooked investors sent shares 11.15 percent lower to 2.01 euros in Paris morning trading.
The Paris-based company said a components shortage held back sales, which Chief Executive Ben Verwaayen said was an "industrywide issue."
He said telecoms equipment makers were competing with auto makers and consumer electronics firms for some of the more basic parts.
"We were not able to fully satisfy customer demand for our products due to tightening components availability," he said. "This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company."
Looking ahead, Alcatel-Lucent said demand for telecommunications equipment and services is recovering, though its supply chain is still struggling with tight capacity.
Verwaayen kept his expectations for the full year unchanged and said he sees a recovery in the North American market.
Alcatel-Lucent aims to reach an adjusted operating margin between 1 and 5 percent this year.
Verwaayen introduced a three-year turnaround cost-cutting plan last year.
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