Alcatel-Lucent reports write-off headache
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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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Telecommunications equipment maker Alcatel-Lucent said Friday it swung to a loss in the fourth quarter and increased by 3,500 the number of jobs it plans to cut.
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A judge in a San Diego court late Thursday dismissed one of several patent claims Alcatel-Lucent SA has made against Microsoft Corp. in several high-profile cases against the vendor, but that does not mean the software company is out of the woods yet.
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gardel writes &quot;Voxilla reports that a VoIP price war was declared today. An announcement that AT&amp;T would drop its prices for its CallVantage Service from $34.
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(InfoWorld) - Concerns about a spending slowdown continue to make IT investors nervous. The tech-heavy Nasdaq Composite Index closed Thursday at 2601.06, down from the 2700 level two months ago. The faltering U.S. housing sector, widespread mortgage payment failures, and related worries about the credit market have depressed share prices since the middle of the third quarter. IT companies, although not hit as hard as businesses in other sectors, have not been immune to the turmoil. A tightening of credit is often expected to dampen business and consumer spending. SoÂ Alcatel-Lucent's Thursday warning about the quarterÂ and the rest of the year struck a nerve, several weeks in advance of quarterly results. The company said it expects to break even on an operating basis in the quarter, and cut its 2007 revenue forecast. It said revenue for the year would be flat or slightly up, at constant exchange rates. Previously, it said that revenue would be up about 5 percent for the year. It was the third time this year the company cut its projections. Its share price dropped $0.88 to close at $9.16 Thursday. Alcatel-Lucent's announcement hinted at what many market observers have been fearing: slowing purchases by North American customers. "Alcatel-Lucent is now seeing a change in capital spending with those (North American) customers in 2007, compared to what it had anticipated," the company said. The company said it still expects ongoing cost savings in the wake of the merger of Alcatel and Lucent, but that did not quiet concerns about the overall market. "Merging may have made sense, but it does not change the marketplace. Demand is demand and that does not change because of mergers," said telecom analyst Jeff Kagan in an e-mail report. A slowdown in demand would make competition in the tough telecom market even more fierce. Earlier this week Alcatel-Lucent rival LM Ericsson said it was gaining market share in Europe and Asia. Ericsson shares rose $0.36 Thursday to close at $36.59. Ericsson's claims notwithstanding, U.S. and European vendors are getting hit with increasing competition from Chinese vendors such as Huawei Technologies and ZTE, which are steadily expanding their product portfolios. Not all tech-sector news this week was grim, however. The notebook market continues to experience explosive growth, according to a report released earlier this week by market research company DisplaySearch. The nine biggest notebook companies saw double-digit growth during the second quarter, while the market, measured by units shipped, grew by more than 24 percent, DisplaySearch said. Although those figures were generated before the third-quarter turmoil, the firm raised its estimate from 97.5 million notebooks shipping in 2007 to 103 million. The true impact of economic turmoil on IT will not be clear until the end of the year. For now, IT investors will try to read the tea leaves, in the form of quarterly results that will start to trickle in next over the next few weeks. Â
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(InfoWorld) - BenQ blamed poor product management for racking up losses of over â¬840 million ($1.07 billion) at its mobile division, BenQ Mobile. The poor management led to cost overruns and launch delays, and the losses prompted BenQ to cut off funding from the mobile division last week. The Taiwanese company said it simply is not big enough to sustain such losses, which stretched from the time itÂ took over the German handset divisionÂ from Siemens last October through to the end of last month. BenQ's stock capitalization is only â¬640 million, it said. The company was in talks with Siemens about possible ways to save BenQ Mobile up to two weeks before the decision was made to stop funding it and let itÂ file for bankruptcy protectionÂ in Germany, a decision announced last Thursday. Siemens paid BenQ â¬250 million last year to take the mobile division off its hands. "There have been some reports that said we 'just walked away.' This was a really tough decision, it wasn't at all easy to walk away," said Eric Lei, chief business strategy officer at BenQ, in a group interview on Tuesday with reporters. On Monday, Siemens announced that it had set up a â¬35 million fund toÂ aid BenQ Mobile workersÂ at risk of losing their jobs, and expressed shock at BenQ's decision to "put its people on the street." The Taiwanese company said it believes there is workers' insurance to protect BenQ Mobile's 3,000 employees, and that it currently has no plans to put money into any kind of worker fund. At the heart of the trouble with BenQ Mobile was an inability to turn around product management problems, BenQ said. The Taiwanese company stopped short of laying blame for the failure on any specific group, saying that some German handset projects went awry, as did some on the Taiwanese side, while poor communication between Taipei and Munich hurt other projects. Without the product management issues, BenQ Mobile could have broken even, said Eric Yu, BenQ's chief financial officer. Some news reports have alleged name calling and legal threats from both sides over the fate of BenQ Mobile workers after the bankruptcy filing. BenQ executives said there has been no official contact between the two companies and that the talk is mere speculation. One point of contention that has been widely reported is that Siemens still owes BenQ money as part of the original deal to take over the handset division. Lei said the figure is over â¬150 million, but would not be more specific. He said that BenQ expects that Siemens will honor the contract and pay the figure, some of which goes to BenQ and some which should go to BenQ Mobile. One news report had said Siemens was looking into ways to pay the entire amount to BenQ Mobile so that it could benefit displaced employees. The German electronics giant said its decision to sell the mobile phone division to BenQ provided the greatest possible benefits to employees at the time of the sale, and that closing the business outright would have been a less expensive option. BenQ had presented a credible plan for operating and expanding the mobile phone division at the time of the sale, and Siemens believed it was sincere, it said. Â
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VALENCIA, Spain, June 1  /PRNewswire-FirstCall/ -- Vodafone and Alcatel-Lucent (Euronext Paris and NYSE: ALU) today announced a cooperation agreement to deliver the award-winning America's Cup Live Sailing service developed by Alcatel-Lucent in Vodafone's mobile portal.
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Sprint Nextel Corp., the nation's third-largest wireless provider, said Thursday it will have to write off a significant chunk of the remaining value of its 2005 purchase of Nextel Communications Inc. and several affiliates, reflecting the continued struggles of its wireless operations.
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SAN DIEGO -- Alcatel - Lucent told a jury it is owed almost $2 billion for Microsoft Corp.'s use of the standard technology for playing music and audio files on a computer, a dispute that may affect hundreds of companies that rely on MP3.
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Alcatel-Lucent, a telecoms equipment giant valued at 21.5 billion euros (27 billion dollars), began life after the merger of French group Alcatel and its former US rival Lucent.
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Alcatel-Lucent  on Friday said it would cut some 12,500 jobs over three years as it reported a dip into net loss for the fourth quarter and forecast a drop in first-quarter revenues.
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France's Alcatel SA completed its $11.6 billion acquisition of Lucent Technologies Inc. on Thursday, creating a new leading global telecom equipment maker, the companies said in a statement.
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InfoWorld - Alcatel-Lucent has invested in WiMax chip maker Sequans Communications, the latest show of support for the emerging long-range wireless networking technology.
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With Alcatel-Lucent having been awarded $1.5 billion from Microsoft by a Jury in San Diego yesterday, the other hundreds of companies who hold Fraunhofer/Thomson licenses to the MP3 audio format whose names aren't "Microsoft" must be asking themselves whether similar fates await them in the near future.
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Alcatel shareholders flocked to vote on   the French telecom equipment firm's $10.9 billion deal to buy   U.S. rival Lucent on Thursday as executives prepared to take on   harsh critics of the move.
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PARIS  --  Alcatel SA and Lucent Technologies Inc. overcame shareholder misgivings to win firm backing Thursday for their $10.7 billion tie-up to create a major global telecommunications equipment maker.
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Alcatel-Lucent reported higher sales but a net loss for the fourth quarter due to a big writedown in its CDMA (code division multiple access) and IP (Internet protocol) multimedia services businesses.The company said revenue rose 18 percent to &#8364;5.2 billion on the back of strong performance at several of its major business units. But despite the stronger sales the company saw its net profit plunge into the red to the tune of &#8364;2.6 billion. This was largely due to the &#8364;2.5 billion writedown.Its wireline and wireless carrier business was strong and revenues were &#8364;3.7 billion in the quarter against &#8364;3.2 billion during the same period a year earlier. The company benefited from strong growth in carrier-type optical networking, and the GSM (Global System for Mobile Communications) and WCDMA (Wideband CDMA) sectors. Broadband access revenue fell on the back of a decline in the number of DSL lines delivered.Revenues were up 27 percent in the services business to &#8364;1 billion after the company won large network operations contracts and worked on IPTV and IP network integration projects. Its enterprise business segment saw revenues of &#8364;435 million, up about 4 percent, thanks to strong momentum in Europe and Asia.The report came with bad news for investors. The company suspended its dividend payment for 2007 &quot;in the light of these results and or a more uncertain market outlook,&quot; it said.&quot;We just thought very plainly that it was good financial discipline looking at both our net income in &#39;07 and the very tough macroeconomic environment,&quot; said Hubert de Pesquidoux, chief financial officer, on a conference call.CEO Patricia Russo warned that the company doesn&#39;t have a positive short-term outlook, particularly with a looming recession in the U.S. given Alcatel-Lucent&#39;s dependance on business there.&quot;There is a level of uncertainty ... that leaves a lot unknown,&quot; Russo said.Despite interest in IP networking and 3G broadband services, growth over the next year is likely to be flat or just slightly up, Russo said. Taking into account currency differences, the market will likely be down, she said.Some customers are also pursuing network-sharing arrangements, which could affect how much those companies spend on their own infrastructure, she said.Russo defended the&#160;2006 merger of Alcatel and Lucent&#160;and said the company is still trying to reduce costs. So far, about 6,700 employees have been let go in&#160;a restructuring plan&#160;that will shed a total of 12,500 employees, she said.