Alcatel-Lucent warns of troubles in wireless

Although Alcatel-Lucent warned of lower revenues and an operating loss for the first quarter, it appears that investors had expected worse as the company’s stock rose more than 5 percent on its announcement to $13.22 per share. The firm blamed much of its first-quarter woes on its wireless business.
“In particular, while parts of our businesses performed well, our first quarter results were impacted by lower volumes in traditional wireless and core networks at a time when considerable investments were made in the next generation of these technologies,” said Patricia Russo, CEO of Alcatel-Lucent, in pre-releasing the company’s first-quarter financials. The company will report full first-quarter results May 11.
Specifically, Alcatel-Lucent cited “lower volumes especially in 2G in some emerging markets” for its wireless troubles. Alcatel Lucent did announce a three-year, $6 billion deal last month to supply Verizon Wireless with CDMA2000 1x EV-DO Revision A equipment.
Alcatel-Lucent said its revenues for the first quarter would drop 8 percent year over year to $5.3 billion. The company’s operating loss also widened over the same period to $354 million.
Alcatel-Lucent, the entity made up of infrastructure powerhouses Alcatel S.A. and Lucent Technologies Inc., runs up against a number of major challengers in the network equipment playground, most notably L.M. Ericsson and the newly combined Nokia Siemens Networks.