Alcatel-Lucent (ALU) Struggles, Sprint (S) Sees Gains

NEW YORK (TheStreet) -- Alcatel-Lucent's (ALU) uncertain future was put in the spotlight as CEO Michel Combes defended his plans to turn the company around.

"This company could disappear," CEO Michel Combes told radio station Europe 1 on Tuesday. "This company hasn't made money since 2006."

The French telecommunications manufacturer plans to cut 10,000 jobs by 2015, saving 1 billion euros ($1.4 billion) and reducing fixed costs by more than 15%. In Paris on Tuesday, 1,500 Alcatel-Lucent employees marched to the Eiffel Tower in protest of the cuts.

"We must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives," Combes said in a statement last week.

U.S. telecommunications company Sprint Corporation  (S) shares have gained after a Macquarie upgrade to "outperform" from "neutral." Macquarie raised its price target to $7.50 from $7. Analyst Kevin Smithen said recent weakness has created an entry point to take advantage of potential 20% to 30% gains in 2014.

Alcatel-Lucent dropped 1.32% to $3.60 as of 11:30 a.m. New York time, while Sprint shares were 3.81% higher to $6.26.

TheStreet Ratings team rates Alcatel-Lucent as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate Alcatel-Lucent (ALU) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and feeble growth in its earnings per share."

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