Alcatel-Lucent Shares Tumble on Outlook
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Shares in the telecommunications equipment maker fell today to their lowest level after the company slashed its forecast for full-year revenue growth.
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Alcatel and Lucent Technologies Inc have stepped further down the aisle after their shareholders separately voted in favor of their proposed union whereby the French telecom gear maker would buy its US rival for about $10.9bn.
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Alcatel-Lucent opened for business Friday as one of the world's biggest telecom gear makers, signaling a new push into enterprise markets eight months after Alcatel agreed to buy U.S. rival Lucent in a deal worth $11.6 billion.
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Investors are expected to dump technology shares today in the wake of a financial update last night from bellwether Intel Corp. that one analyst called &quot;a disaster.
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Telecommunications gear maker Alcatel-Lucent  could cut more than 20 percent of its world-wide staff, L'Expansion weekly said on Tuesday on its Website, citing industry sources.
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Alcatel-Lucent, a global communications giant with combined annual revenue of more than US$24 billion, will debut Friday after a sometimes rocky engagement between Alcatel SA and Lucent Technologies Inc.
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Telecommunication equipment titan Alcatel-Lucent sees global economic woes causing it uncertainty in 2008 after the newly merged company survived a choppy 2007, reporting a fourth-quarter loss Friday and scrapping its dividend for last year.
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By James Kanter  Shareholders have approved the merger between the telecommunications equipment makers Alcatel and Lucent, but only after Alcatel shareholders voiced strong doubts about the leadership and financial health of their new American partner.
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All part of the same cull Alcatel-Lucent said today that it plans to slash 400 jobs in France as part of its brutal cost-cutting strategy to axe 4,000 employees worldwide.â¦
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Shares plunge, company says to miss Wall Street forecasts as price cuts, expansion squeeze margins. NEW YORK  - Wild Oats Markets Inc.
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Costly woes continue Alcatel-Lucent has admitted its outlook is dire after it disclosed it would be writing down $4.3bn of assets.â¦
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Newly-merged telecoms firm Alcatel-Lucent is to cut 12,500 jobs in three years as profits are halved.
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(InfoWorld) - Shareholders of Alcatel SA and Lucent Technologies Inc. approved the companies' merger plansÂ Thursday, clearing one of the last hurdles to a mammoth consolidation in the communications equipment business. The merger scraped by at Lucent's special shareholder meeting Thursday in Wilmington, Delaware. It required 50 percent of the vote and received 51.97 percent, according to spokesman John Skalko. Alcatel, meeting in Paris, required a two-thirds vote of shareholders. All resolutions related to the merger were approved by at least 85 percent of the Alcatel shareholders who voted, said Alcatel spokesman Charlie Guyer. The two networking and telecommunications equipment manufacturers announced their intention to merge in April. The combined entity will have annual revenue of around â¬21 billion (US$25 billion), based on the companies' 2005 financial results. Lucent Chief Executive Officer Patricia Russo will become CEO of the combined company, which is to be called Alcatel Lucent, while Alcatel CEO Serge Tchuruk will become a non-executive chairman. Lucent, based in Murray Hill, New Jersey, is incorporated in Delaware. The merged company will be based in Paris, Alcatel's hometown. Alcatel and Lucent expect that the merged entity will make annual cost savings of about â¬1.4 billion, around half of that from job cuts. They plan to cut 9,000 from their combined payroll of 88,000. The U.S. Federal Trade Commission approved the deal in June, and the European Commission gave its consent in July. The largest remaining obstacle is convincing the Committee on Foreign Investment in the U.S. that the deal presents no threat to national security. To allay such fears, Lucent will set up a separate subsidiary run by U.S. citizens to handle sensitive research and development work for the U.S. government, while in France, Alcatel agreed to sell its satellite business to French aerospace electronics group Thales SA for similar reasons. The proposed deal has run into opposition from some investment companies and shareholders. Lucent announced on Friday it had settled two shareholder lawsuits that could have delayed Thursday's vote. Shares of both companies have fallen from their April levels, though they have made some gains in the past few weeks.
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Alcatel-Lucent said it plans further layoffs after its post-merger financial performance continued to disappoint.The company fleshed out its three-point plan for restoring profitability on Wednesday, including a renewed focus on products to help carriers transform their networks to an all-IP (Internet Protocol) infrastructure, a move from products to value-added services, and a more streamlined organization with fewer staff in support functions to eliminate post-merger duplication. It will cut a further 4,000 jobs by 2009, in addition to the thousands it has already shed, and hopes the moves will save it a further &#8364;400 million (around $575 million) by that date, it said.In another change, Alcatel will reduce its senior management team to seven members, from 11, and&#160;Chief Financial Officer Jean-Pascal Beaufret will leave, to be replaced by enterprise systems group head Hubert de Pesquidoux.Alcatel-Lucent&#39;s board has expressed its disappointment with the&#160;decline in performance&#160;since the Dec. 1&#160;merger of Alcatel and Lucent Technologies, but expressed its continued support for CEO Patricia Russo earlier this month. Russo has the board&#39;s support for her plan to restore the company to profitability, she said Wednesday.&quot;It&#39;s not a plan solely focused on cost. It&#39;s also focused on growth,&quot; she said in a conference call with analysts.As part of the plan, the company will simplify its regional structure, dividing the world into just two regions, the Americas and the rest. It will also pull out of between 10 and 20 countries where its margins are too slim to make a profit, Russo said. In those countries it will pursue &quot;an alternative strategy where we can continue to support customers but through different means,&quot; she said.For the quarter ended Sept. 30, the company reported revenue of &#8364;4.35 billion, a fall of 11.4 percent compared to the &#8364;4.91 billion that the two companies made a year earlier. Alcatel-Lucent provided comparable figures for the companies&#39; performance before their merger on Dec. 1.Currency fluctuations hurt the company&#39;s performance: the decline in revenue would have been 7.8 percent at constant exchange rates.Alcatel Lucent remains in the red, with a loss of &#8364;345 million this quarter, or &#8364;258 million excluding restructuring charges, compared to a comparable net profit of &#8364;532 million for the companies a year earlier.Alcatel-Lucent is still hoping for a &quot;solid ramp up in revenue&quot; in the fourth quarter, but seems less optimistic: it now says revenue for the full year will remain flat, rather than &quot;flat or slightly up&quot; as it predicted last month. The company offered no guidance on earnings for the full year.Revenue from the company&#39;s largest business segment, carrier networks, dropped 15.2 percent year on year to &#8364;3.14 billion, while operating profit for the segment fell from &#8364;389 million to &#8364;22 million. Alcatel-Lucent said the decline was exaggerated by the comparison with unusually strong sales of CDMA (code division multiple access) wireless networks in North America in the third quarter last year, as operators rushed to deploy a performance-enhancing software upgrade.The company has converged two of its three CDMA platforms since the start of the year, and expects to merge the remaining two by the third quarter of next year, Russo said. Going forward, it will focus research and development spending on new revenue opportunities such as the transformation of wireless networks to all-IP systems.As part of its restructuring, the company will eliminate a layer of management, merging the wireless, wireline and convergence networks divisions of the carrier networks business segment.Services revenue remained flat at &#8364;777 million, while operating profit in that sector fell to &#8364;40 million from &#8364;60 million a year earlier. The company sees services around the delivery of IPTV (Internet Protocol television) programming as a strong area.One bright spot was the company&#39;s enterprise networks business, where revenue rose to &#8364;380 million from &#8364;362 million a year earlier, with operating profit rising to &#8364;29 million from &#8364;24 million a year earlier. The move by businesses from traditional switched telephone systems to VOIP (voice over IP) on internal networks was a key driver, the company said.This article was updated with new information on October 31, 2007.
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Lucent Technologies Inc. , among the world's largest makers of telecommunications equipment, fell 2.7 percent before the opening bell on Wednesday.
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Shares in Asian liquid crystal display makers sank Tuesday after LG.Philips LCD, the industry&#39;s number two, reported a surprisingly large fall in profits and warned of a further slide in flat-screen prices.
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(InfoWorld) - The first week of September, the unofficial start of the new season, has been hectic for IT investors. Analysts are scrambling to parse through news from networking giants Cisco Systems Inc., Alcatel SA and Lucent Technologies Inc., and a board fracas at Hewlett-Packard Co. caused the company to come under the scrutiny of the U.S. Securities and Exchange Commission as well as the California State Attorney General. The big question for Wall Street analysts and institutional investors attending the Cisco Systems Inc. analyst day in New York Wednesday was whether the vendor could sustain its revenue and profit momentum. Executives lead by Chief Executive Officer John Chambers said that by incorporating data, voice, video and mobile capabilities -- its so-called "quadruple play" -- across all its product lines, Cisco can take advantage of converging networks in the service provider, enterprise, commercial and consumer markets. The company reiterated its forecast of 10 percent to 15 percent growth for the next three to five years. But more importantly, in wide-ranging give-and-take with the Wall Street community, company executives appeared very confident about specific details that backed up the forecast. "They were very bullish," noted Mark Sue, an analyst with RBC Capital Markets. Sue said that two good signs were the company's confidence that it could keep its tax rate down to current levels (hovering around 25 percent) and Chief Financial Officer Dennis Powell's statement that the company would pay out a dividend at some point. The company did not get an uptick after the meeting, even though some analysts said they thought shares have a lot of potential to move upward. Part of the problem may be that Cisco was caught in the general market depression this week, as a result of reports of slowing housing sales. Cisco (CSCO) closed at US$21.54 Thursday, down $0.15. Meanwhile Alcatel SA and Lucent Technologies Inc. shareholders approved the merger of the two networking vendors Thursday. The merger is seen as part of a trend toward consolidation in the networking and telecom markets. There is intense competition in the growth areas of the mature enterprise market -- such as VOIP -- while Chinese manufacturers are putting pressure on the Western networking giants on the low end. IT investors are taking a wait-and-see approach to Alcatel-Lucent. On Thursday, Lucent (LU) shares closed at $2.25, down by $0.02, while Alcatel shares (ALA) closed at $11.77, down by $0.24. On his part, Cisco's Chambers sees his greatest competition coming from Asia, not Paris or New Jersey. A board disagreement at HP, meanwhile, is a sign of the times. An internal investigation by HP to see which members of its board of directors leaked information to the press resulted in several board members leaving earlier this year. One departed board member, Silicon Valley venture capitalist Thomas Perkins, has accused HP of using possibly illegal means to conduct its investigation, sparking newly revealed government inquiries. However it ends, the squabble is seen to signify the end of an era when board members were all good friends of the chief executive. The leaks stemmed back to the time when the board started having critical discussions of ex-CEO Carly Fiorina. Though current CEO Mark Hurd appears to be well on the way to a healthy reorganization of the company, the board infighting could be a distraction. HP (HPQ) shares closed at $35.42 Thursday, down by $0.42.