Alcatel-Lucent Posts 4Q Adjusted Operating Profit; Sees 1Q 08 Loss

Published on: 8th February 2008

PARIS -(Dow Jones)- Franco-American telecommunications equipment maker Alcatel-Lucent Friday swung to a fourth-quarter adjusted operating profit of EUR303 million, helped by revenue growth, but said it expects to post a loss in the first quarter of 2008.

Due to a seasonal drop in revenue in the first quarter, Alcatel-Lucent expects to report a first-quarter loss at the adjusted operating level, the company said in a statement. It also said it would scrap its divident payment.

For the whole of 2008, the company expects its adjusted operating margin to be between 2.5% and 5% of revenue, Chief Financial Officer Hubert de Pesquidoux told a conference call.

Alcatel-Lucent said it initially forecasts the global telecommuncations equipment and related services market in 2008 to be "flat to slightly up" at a constant euro-dollar exchange rate and "slightly down" at the current rate.

"While the long term prospects of our industry remain good, the macroeconomic environment has created uncertainty in our markets in the last few months," Chief Executive Patricia Russo said in a statement.

Rival gear companies Ericsson and Nokia Siemens Networks have already given their own downbeat forecasts for the market in 2008.

Adjusted operating profit for the quarter ended Dec. 31 was EUR303 million after a EUR3 million loss a year earlier on a pro-forma basis. A poll of 12 analysts by Dow Jones Newswires had forecast profit of EUR251.3 million.

Revenue grew to EUR5.23 billion from EUR4.42 billion a year ago, above the EUR4.92 million forecast by analysts. The fourth quarter of 2006, during which Alcatel SA of Paris and Lucent Technologies Inc. of Murray Hill, New Jersey, completed their merger, saw the newly minted company post disappointing revenue.

The higher revenue in the fourth quarter of 2007, which increased 24% quarter-on-quarter at constant currency rates, translated into improved profitability due to the company's fixed cost structure. The fourth quarter is traditionally a strong period for telecom equipment companies.

Meanwhile, Alcatel-Lucent reported a fourth-quarter net loss of EUR2.58 billion and of EUR3.52 billion for the whole of 2007. Excluding non-cash goodwill write-downs related to the former Lucent's businesses, the company posted an adjusted fourth-quarter net loss of EUR48 million compared with a EUR618 million loss a year earlier.

Before Friday, Alcatel-Lucent's share price had plunged about 60% over the previous 12 months on the back of a string of profit warnings and concern over the growth prospects for the telecommunications equipment market in 2008.

Alcatel-Lucent shares closed Thursday down 4.2%, or EUR0.18, to EUR4.13 compared with a 1.9% drop in France's benchmark CAC-40 index.

-By Jethro Mullen, Dow Jones Newswires; 33 1 4017 1738; jethro.mullen@dowjones.com

(END) Dow Jones Newswires

 

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