Alcatel-Lucent: Our Earnings Stink in French and English

John Paczkowski — Tue, 05 May 2009 13:29:27 +0000

The econalypse is eroding demand for telecommunications equipment. Operators are cutting spending for network upgrades. Market conditions are tough, but we are taking appropriate actions. It’s a story we’ve heard before, from Ericsson (ERIC), Nortel (NT) and Cisco (CSCO). This morning we heard it from Alcatel-Lucent (ALU). The French-American telecommunications maker said today that its first-quarter net loss more than doubled from a year ago amid a souring economy that’s got its customers slashing capital expenses to preserve cash. With sales down 6.9 percent, Alcatel lost $563.6 million in the quarter, more than twice last year’s $241.7 million loss.

Ugly, even more so considering this is the company’s ninth consecutive quarterly loss since it was created in 2006.

“While expected, given seasonality and tough market conditions, we are not pleased with the operating loss incurred in the first quarter,” said CEO Ben Verwaayen. “Our guidance for the year remains unchanged and we are taking appropriate actions….There’s lots of work we still need to do.”

Alcatel-Lucent: Let's Get Small

John Paczkowski — Fri, 12 Dec 2008 16:50:56 +0000

Alcatel-Lucent, the world’s largest maker of telecommunications equipment, won’t be quite so large come 2009. This morning the struggling Franco-American network supplier said it plans to sack 1,000 managers and 5,000 contractors in a bid to bring down costs. “The new management team is committed to rapidly executing this new strategy and leveraging the new streamlined organization,” CEO Ben Verwaayen said in a statement. We are focused on delivering results and restoring profitability.”

This latest swing of the ax brings total job cuts at Alcatel-Lucent (ALU) to about 22,500 since the 2006 merger that created it. And though the company will be leaner and meaner for it, that new found agility won’t count for much without a shift in business strategy bold enough to reverse the brutal reduction in market share and market capitalization Alcatel-Lucent has suffered. And an oblique and, frankly, baffling mention of Web 2.0, does not a business strategy make.

Alcatel-Lucent’s plan is to “combine the trusted capabilities of the network environment with the creative communications services of the Web (Web 2.0, Web 3.0 and beyond).” What the hell does that mean?

Digital Daily » Ben Verwaayen

Alcatel-Lucent: Our Earnings Stink in French and English

Alcatel-Lucent: Let's Get Small