Alcatel-Lucent posts Q3 loss: Restructuring costs, asset sales likely
Alcatel-Lucent said today it may resort to strengthening its finances by selling off assets, according to the firm's chief financial officer, but declined to name which divisions or units may go.
CFO Paul Tufano said earlier today: "We have assets we can dispose of that would bring in a good amount of liquidity," reports Bloomberg, while its CEO Ben Veraayen said that 5,500 jobs would go worldwide -- including 15 percent of its French workforce, as the firm bids to save €1.25 billion ($1.60bn).
The Paris, France-based firm said it lost €146 million ($188m) on revenue of €3.6 billion ($4.64bn), a 1.5 percent increase on the second quarter, but down 2.8 percent year-over-year.
The telecoms equipment maker reported an operating loss of €125 million ($161m), from €31 million ($39.9m) in the second quarter. The firm's gross margin stands at 27.9 percent.
Cash currently stands at €4.7 billion ($6.05bn) after burning through €1.03 billion ($1.33bn) in the first nine months up to the end of September. Veraayen warned: "The speed of our cost cutting will have an impact on our cash position," on the earnings conference call.
According to Reuters, Alcatel-Lucent was expecting a third quarter sales of €3.51 billion ($4.52bn), according to 11 analyst estimates. The company's shares fell by close to 8 percent in early trading on the Paris Stock Exchange.
Alcatel-Lucent chief executive Ben Veraayen said in prepared remarks:
"Our third quarter results are reflective of the significant transformation we are undertaking both in terms of scope and timing. In addition, our revenue growth and gross margin were impacted by overall carrier spending dynamics and product mix, especially in wireless."
The firm supplies technology to a range of cellular networks, including AT&T, Verizon, and France Telecom. But the firm has struggled in the face of competition against its European rivals, such as Finland-based Nokia Siemens Networks (NSN) and Sweden-based rival Ericsson.
While the Nokia-Siemens joint venture faces troubled times and massive job cuts, along with the possibility that Ericsson is eyeing up a sale of the Nokia division, Ericsson continues to fare well on the whole.
Earlier this year, Alcatel-Lucent warned that a poor global economy may result in the firm falling short of its fiscal year expectations. The firm said it may post an operating loss of €40 million ($51.5m) with revenue around €3.5 billion ($4.5bn).