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October 31, 2009

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Firm hit by fall in sales in Europe

ALCATEL-LUCENT SA yesterday said its net loss widened in the third quarter as the telecommunications equipment maker lost sales in Europe, its key carrier market.

Alcatel-Lucent, headquartered in Paris and with significant North American operations based in Murray Hill, New Jersey, made a net loss of 182 million euros (US$269 million) in the period, compared to a 40-million-euro loss a year earlier and worse than analysts had forecast.

In a statement yesterday, Alcatel-Lucent said it still expects to be close to break even at an adjusted operating level this year, despite having accumulated 327 million euros in losses by that measure through the first three quarters of this year.

Alcatel-Lucent, one of the world's biggest suppliers of networking gear and services for wireless and fixed telecommunications operators, said its revenue fell 9.3 percent in the third quarter to 3.7 billion euros.

The drop was driven by double-digit declines in older technologies such as 2G wireless, as operators have slashed investment in response to the global economic slowdown.

Earlier this week France Telecom SA, one of Alcatel-Lucent's biggest customers, said it had sharply cut back its capital spending in a bid to conserve cash and focus on reducing its debt.

Alcatel-Lucent's third-quarter performance was on par with the disappointing earnings reported earlier this month by its main European rivals, LM Ericsson AB of Sweden and Nokia Corp of Finland.

Alcatel-Lucent has been struggling for years to justify the 2006 trans-Atlantic merger that created it with the aim of becoming a global telecom leader. Total losses generated by the firm since then now top 9 billion euros.



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