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Loss in Q4 widens on assets writedown
By Rudy Ruitenberg |
February 5, 2009, Thursday
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Print Edition
Print Edition
ALCATEL-LUCENT SA, the world's largest supplier of fixed-line phone networks, posted an eighth straight quarterly loss as it wrote down the value of assets by a record 3.91 billion euros (US$5.1 billion).
The fourth-quarter net loss widened to 3.89 billion euros from 2.58 billion euros a year earlier, Paris-based Alcatel-Lucent said in a statement yesterday. Analysts, whose estimates didn't include a writedown, predicted a profit of 158.6 million euros, the average of 10 estimates compiled by Bloomberg News.
Yesterday's report brings the equipment maker's writedowns to about 8 billion euros since Alcatel SA bought Lucent Technologies Inc in 2006 as demand slumped and stock markets plunged.
Rival Nortel Networks Corp sought bankruptcy protection last month after almost US$7 billion of losses since 2005.
"We have taken a substantial impairment charge which I think reflects the deterioration in the marketplace and also the change in our strategy," Chief Executive Officer Ben Verwaayen told journalists. "It's a big number."
Sales fell 5.3 percent to 4.95 billion euros. Analysts predicted 4.8 billion euros, the average of 17 estimates. Excluding the writedown and adjusted for merger-related items, Alcatel-Lucent posted an operating profit of 297 million euros.
Verwaayen and Chairman Philippe Camus in September replaced Patricia Russo and Serge Tchuruk, the architects of the 2006 merger who failed to establish a profitable firm and oversaw a 13.5-billion-euro drop in market value.
The new management team said in December it would cut 1 billion euros in costs in each of the next two years.
The fourth-quarter net loss widened to 3.89 billion euros from 2.58 billion euros a year earlier, Paris-based Alcatel-Lucent said in a statement yesterday. Analysts, whose estimates didn't include a writedown, predicted a profit of 158.6 million euros, the average of 10 estimates compiled by Bloomberg News.
Yesterday's report brings the equipment maker's writedowns to about 8 billion euros since Alcatel SA bought Lucent Technologies Inc in 2006 as demand slumped and stock markets plunged.
Rival Nortel Networks Corp sought bankruptcy protection last month after almost US$7 billion of losses since 2005.
"We have taken a substantial impairment charge which I think reflects the deterioration in the marketplace and also the change in our strategy," Chief Executive Officer Ben Verwaayen told journalists. "It's a big number."
Sales fell 5.3 percent to 4.95 billion euros. Analysts predicted 4.8 billion euros, the average of 17 estimates. Excluding the writedown and adjusted for merger-related items, Alcatel-Lucent posted an operating profit of 297 million euros.
Verwaayen and Chairman Philippe Camus in September replaced Patricia Russo and Serge Tchuruk, the architects of the 2006 merger who failed to establish a profitable firm and oversaw a 13.5-billion-euro drop in market value.
The new management team said in December it would cut 1 billion euros in costs in each of the next two years.
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