Troubling outlook dims Alcatel-Lucent

Alcatel-Lucent’s first-quarter financials held few surprises, but the company’s new outlook — “flat” instead of the previous “flat to slightly up” — appeared to spook investors, who sent the company’s shares down around 4% to $6.74 per share on the news.
Nonetheless, Alcatel-Lucent chief Patricia Russo said the company continues to hold on in a competitive market, explaining that “we are taking the right actions to position the company to take advantage of the long-term growth potential we see in the industry driven by new subscribers, more broadband deployments and video and data traffic growth.”
Alcatel-Lucent reported revenues of $6 billion in the quarter, down half a percent from the same quarter a year ago. The company lost $148 million in the quarter, a wider loss than it reported in the previous quarter and a significant change from the $310 million in profit it scored in 2007’s first quarter. The results exclude expenses related to the integration of Alcatel and Lucent, and the company said they are largely what it expected.
As for wireless specifically, Russo said “our wireless access business showed good resilience, as the expected decline in CDMA was more than offset by the strong year-over-year double-digit growth of our revenue in GSM, W CDMA and RFS.”
As for the company’s outlook for the remainder of the year, Alcatel-Lucent said it expects revenue “to be down in the low to mid-single digit range. This is due primarily to the significant deterioration in the Euro/USD exchange rate and, to a much lesser extent, the potential for lower capital spending by a few customers.”
The results follow more upbeat numbers from rival L.M. Ericsson.