Look for telecommunications-equipment maker Alcatel-Lucent to cut 5,500 jobs to save more than 1 billion euros after the company reported another quarter of losses.
France-based Al-Lu lost 146 million euros in Q3 2012, compared to a profit of 194 million in the year-ago quarter. If there was a bright spot, analysts were predicting a loss of 149 million, Bloomberg said. Alcatel-Lucent is in the middle of a restructuring program that company CEO Ben Verwaayen says has already saved 450 million euros.
Alcatel-Lucent is more than 2 billion euros (U.S. $2.55 billion U.S.) in debt, and prior job cuts haven't eaten into that number enough.
Company revenues were up 1.5 percent compared to the previous quarter, and down 2.8 percent compared to the year-ago quarter. Al-Lu projects a "positive net cash position at year-end 2012" and anticipates its adjusted operating margin in the second half of the year to be better than that of the first half.
Slow and steady it goes, says Verwaayen.
“Our third quarter results are reflective of the significant transformation we are undertaking both in terms of scope and timing," the Alcatel-Lucent boss said. "In addition, our revenue growth and gross margin were impacted by overall carrier spending dynamics and product mix, especially in wireless. During this transition period we are very focused on insulating our core operating business by maintaining our commitment to innovation and our investment levels in R&D. Our recent significant wins in the U.S, China and Brazil as well as the 20 percent growth in the order book for our HLN products have emphasized our relevance with the leading carriers as they roll-out their next generation networks."
Alcatel-Lucent's stock is now trading at a 23-year low. A sale of some assets seems highly likely at this point.
“We are looking at all the options to strengthen our balance sheet," Bloomberg quoted Alcatel-Lucent's chief financial officer as saying, on the company's earnings conference call. “We have assets we can dispose of that would bring in a good amount of liquidity."