Alcatel Lucent Sees More Losses, Cuts Dividend
Updated from 7:09 a.m. EST
Alcatel Lucent (ALU), plagued by uncertainty and continued weak sales in wireless gear, disappointed investors yet again.
The Paris telecom-equipment maker posted an adjusted quarterly loss of $73 million, or 3 cents a share. While that was an improvement over the 36-cent pro forma loss in the year-ago quarter, it was well below the profit of 15 cents analysts surveyed by Thomson Financial were expecting.
For the fourth quarter, sales were up 18% from a year ago to $7.6 billion, but for the full year, the top line of $25.7 billion was a 2% decrease from 2006 levels. Analysts expected $7.3 billion in sales for the fourth quarter and $24.8 billion for the full year.Looking ahead, Alcatel Lucent CEO Pat Russo predicted a seasonal slump in sales and another quarter of net losses. Echoing some of the comments made by Cisco (CSCO) CEO John Chambers Wednesday, Russo says she saw some recent difficulty, but didn't specify where. "While the long-term prospects of our industry remain good, the macroeconomic environment has created uncertainty in our markets in the last few months," Russo said in a press release Friday. The difficulty was enough to kill the company's dividend, though. "In light of these results and of a more uncertain market outlook, the board has determined that it is prudent to suspend dividend payment for 2007," the company said in the release. Russo has been attempting to turn the networking equipment giant around through a restructuring plan, which calls for the firing of 12,500 workers. But this latest earning report represents the fourth consecutive shortfall for the company. With more losses ahead and now no dividend, investors may have lost their patience. Alcatel Lucent shares fell 21 cents, or 3.4%, to $6.04 in premarket trading.
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