It has been yet another disappointing quarter for Paris-based telco equipment maker Alcatel-Lucent, with the firm posting an even greater net loss than last quarter, citing problems with its supply chain.
Alcatel-Lucent posted losses of some $660.3 million for the first quarter, up from the $512 million loss from this time last year. Indeed, the firm has only posted a profit in two quarters since its inception in 2006.
The company blamed its losses on a shortage of crucial components like microchips, which prevented it from meeting its orders, according to the Wall Street Journal.
This resulted in a revenue slump of some 9.8% to $4.1 billion down from $4.59 billion year on year, with revenue sinking 18% from last quarter.
In Asia, where A-Lu is facing formidable rivals such as China’s Huawei Technologies and ZTE Corp., the firm’s revenues took an even larger hit, plunging 18% to $671.77 million in Q1.
Alcatel-Lucent’s CEO Ben Verwaayen told the WSJ his firm was in discussions with component makers to ensure a solution to the supply bottlenecks, and that his firm remained on track to finally make a profit in the second half of 2010 and turn its first-ever full-year profit in 2011.
The chief justified his optimism by citing the ever-growing market for data-guzzling smartphones and handhelds, as well as a series of large U.S.-based orders, including a lucrative contract with AT&T to revamp its network.
Analysts seem to agree with Verwaayen’s buoyancy, with Frost and Sullivan’s Ronald Gruia telling RCR Wireless News that although the results “were obviously a little light and below the consensus of the street,” the company was still going through “ambitious restructuring” that would take a while longer to complete.
Importantly, the company did not back down from its forecast for the year, which means the year will be back-loaded, he maintained, adding that “with contracts for LTE in North America, wireless will be good segment for them.”
Gruia posited that the first quarter had been tough for all infrastructure suppliers, not helped by a weaker capex in China but that the market was set to improve by next quarter.
“I expect this to be a blip in the radar screen,” he asserted.
Meanwhile, A-L shareholders also saw a blip on their share radar as the firm’s stock plunged 6.24% to
just $2.70.
