Alcatel-Lucent (ALU) extended its money-losing streak to nine quarters as it continues to make cuts amid a tech spending slump.
The Paris-based telecom equipment shop posted an adjusted net loss of 18 Euro cents, or 24 cents a share, widening the loss of 7 cents in the year-ago period and falling well below the 9-cent loss analysts were looking for, according to Yahoo! Finance.
Sales for the quarter were 3.6 billion Euros or $4.8 billion, down 7% from last year but above the $4.7 billion mark analysts were looking for.
"As we discussed before, 2009 will be a year of transition," CEO Ben Verwaayen said in a press release Tuesday.
The company says it fired 290 employees in the first quarter and intends to cut another 610 workers, according to its most recent plan. Alcatel-Lucent has launched successive rounds of layoffs since its merger in 2006. The current plan calls for the elimination of 16,500 employees and contract workers by the end of the year.
Looking ahead, the company reiterated its outlook for the industry, forecasting a 10% drop in sales this year from 2008 levels. Alcatel-Lucent says it still expects to reach a break-even point on adjusted earnings this year.
With the global recession and big budget cuts among telcos like
, networking gear suppliers like Alcatel-Lucent,
have been feeling pinched. Adding to that pressure is the rise of China gearmaker
, which has been winning business through price cuts and supplier financing efforts.
"There's a lot going on at Alcatel-Lucent: weak demand, subscale marketshare, cash burn, and an operating loss," said RBC analyst Mark Sue. "Flexibility in the plan may help Alcatel-Lucent reach its profitability targets, yet competition continues to intensify."
Alcatel-Lucent shares were down 11 cents, or 4%, to $2.50 in premarket trading Tuesday.