PARIS -(Dow Jones)- French-American telecommunications equipment company Alcatel-Lucent (ALU) Tuesday said its first-quarter revenue should amount to EUR3.9 billion, down 12% at current exchange rates.
It said the drop was due to the weaker performance of its wireless radio business.
The revenue decline would be 8% at constant exchange rates.
In a statement Alcatel-Lucent also said it should record an adjusted first-quarter operating loss of about EUR260 million, half of which is due to "unusual significant" items.
"The softness in (first quarter) revenues was anticipated," Alcatel Lucent's chief executive officer Patricia Russo said in a conference call, recalling the company had previously warned that "some of the factors that affected the fourth quarter would continue" into the first quarter.
"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," Patricia Russo said in the statement.
The adjusted operating loss compares with an adjusted pro-forma operating income of EUR246 million in the first quarter 2006.
The first quarter adjusted operating loss resulted from lower revenues, the mix effect as well as investments in WCDMA, as well as investment in the converged core portfolio, the company said.
The company also said that due to the successful closing of the transaction with French defense electronics company Thales, the company should book in the first quarter a capital gain before taxes of around EUR780 million.
Alcatel Lucent "should be positively impacted" in the first quarter from this capital gain, as the transaction with Thales implies not only that Alcatel Lucent obtained a stake in Thales but also EUR10 million in cash, Alcatel Lucent Chief Financial officer Jean-Pascal Beaufret told reporters in a conference call.
Yet, he declined to give early indications regarding the first quarter net profit or earnings per share "at this stage."
In April 2006, Alcatel sold Thales its satellite subsidiaries, its railway signaling business and its integration and services activities for mission-critical systems.
In exchange, Alcatel grew its position as the reference shareholder of Thales, with a 21.6% stake.
Alcatel-Lucent's CEO also declined to give early indications regarding the second quarter and beyond.
At the end of the quarter, Alcatel-Lucent's book-to-bill ratio stands at 1.3 times, "which leads us to remain confident in our ability to resume growth as the year progresses," Alcatel's Russo said in the statement.
She said it received a number of contracts during the quarter, including a $6 billion deal from Verizon Wireless.
Alcatel-Lucent is to post first-quarter earnings May 11.
"We will comment further on our outlook for 2007 when we announce earnings with more detail," Russo said.
Regarding the company's cost-savings plan, Russo said the overall headcount reduction so far had reached 1,900 during the quarter, representing 15% of the three-year target of 12,500.
She declined to specify the headcount reduction on a geographical basis.
At 0715 GMT, Alcatel-Lucent shares were down 2.7% at EUR9.05.
Company Web site: http://www.alcatel-lucent.com
-By Geraldine Amiel, Dow Jones Newswires; +331 40171740; firstname.lastname@example.org
(END) Dow Jones Newswires "
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