Thrifty North American carriers frustrate Alcatel-Lucent

Alcatel-Lucent shares tumbled almost 9% after the company announced a revised financial outlook for the remainder of 2007, marking its third warning to investors since the beginning of the year. The company now expects its full-year 2007 revenue growth to be “flat to slightly up.”
The company previously estimated that its revenue would grow in the mid single digits for the year.
Alcatel-Lucent said it will bear the biggest hits in the current quarter, where it now expects operating income to be “around breakeven.” Alcatel-Lucent blamed much of the warning on a downturn in capital spending by some of its wireless customers in North America.
Elsewhere, the company’s wireline and enterprise businesses are performing strong, it said.
For the fourth quarter, the company said it still expects revenue to “ramp-up strongly over the third quarter of 2007.”
“Given ongoing dynamics in the rapidly changing telecom industry, the company is taking steps to accelerate the execution of its current restructuring program and to implement additional focused cost reduction plans in markets which require further actions to be taken,” CEO Patricia Russo said.
“While the company acknowledges that it is competing in a challenging market environment and executing a complex merger, it remains confident that it has the right combination of people and assets to position the company as a leading player in the industry.”
The company said it will provide an update on its plans when it announces third-quarter earnings Oct. 31.