UPDATE 1-Alcatel-Lucent in strategy review, slowdown spreads
October 30th, 2008 | by admin |* guidance for full year 2008 confirmed
* New CEO to unveil strategy review in December
* Thales stake sale a possibility
* Q3 revenues 4.065 billion euros, below expectations
(adds details)
PARIS, Oct 30 (Reuters) - Telecoms infrastructure groupAlcatel-Lucent (ALUA.PA: Quote, Profile, Research, Stock Buzz) said the slowdown spread in itsdeveloped markets and new chief executive Ben Verwaayen willunveil a strategy review for December to streamline the company.
“We have truckloads of things to do,” Verwaayen said onThursday in a conference call with journalists after the groupposted a decline in third quarter sales and operating earningsbut stuck to 2008 guidance.
His to-do list includes “eliminating duplication, looking toefficiency, looking to our IT systems. I am not in a positiontoday to talk about the details,” he said.
Alcatel-Lucent’s sales fell 6.6 percent in the quarter to4.065 billion euros from a year ago or a 0.9 percent slide fromthe previous three months. This was after a “reduction inspending by certain customers in developed markets, especiallyin fixed access and terrestrial optics.”
Analysts market had been looking on average for sales of4.087 billion. They were also seeking comments on the health ofthe North American business after warnings of soft spending byU.S. phone companies by major rivals such as Nortel Networks(NT.TO: Quote, Profile, Research, Stock Buzz), Adtran (ADTN.O: Quote, Profile, Research, Stock Buzz) and Tellabs (TLAB.O: Quote, Profile, Research, Stock Buzz). Verwaayen saidspending here was “mixed.”
He said the group is committed to its CDMA wirelessbusiness, largely the source of the writedowns that led to astring of profit warnings from the group. He said a commonplatform for its client operators was in progress.
Even before the global crisis, Alcatel was hit hard byuncertainty among U.S. customers over which product lines wouldeventualy survive the 2006 merger with Lucent.
The company also said today a sale of its 20.8 percent stakein French defence group Thales (TCFP.PA: Quote, Profile, Research, Stock Buzz) is one of the strategicoptions it has under consideration.
The firm said it still targeted an adjusted gross margin inthe “mid-thirties” for 2008 and an adjusted operating margin inthe low-mid single-digit range.
(Reporting by Matt Gil, Editing by Marcel Michelson)
