Alcatel-Lucent Swings to a Loss, Will Cut 5,000 Jobs

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By Trey Thoelcke Published
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Alcatel-Lucent (NYSE: ALU) this morning reported a net loss of 254 million euro ($308 million), compared to a net profit of 43 million euro ($52 million) a year ago. Revenue fell 7.1% to 3.55 billion ($4.3 billion). This was Alcatel’s first loss in five quarters, and the sales figure was in line with the preliminary number Alcatel posted last week. The company said on July 17 that it would not meet its goal of improving its full-year adjusted operating-profit margin this year.

“It is clear from the deteriorating macro environment and the competitive pricing environment in certain regions challenging profitability that we must embark on a more aggressive transformation,” said Alcatel CEO Ben Verwaayen. The company plans 750 million euros ($908 million) in new cost-cuts by the end of 2013, including the elimination of 5,000 jobs.

Alcatel is France’s largest phone-equipment supplier. It was created by the 2006 merger of Alcatel SA and Lucent Technologies Inc. Nearly one-third of its revenue derives from Europe. There it has faced reduced spending budgets by the region’s largest service providers, as well as lower-cost competition from Asian vendors like Huawei Technology.

Shares are were flat Wednesday and ended at $1.06, in a 52-week trading range of $1.04 t0 $4.97. Shares were down sharply Thursday morning in European trading. Thomson Reuters had a consensus analyst price target of $1.98 before this news.

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About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

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