Tallahassee, FL 11/4/11 (StreetBeat) --Alactel-Lucent (NYSE: ALU) shares are trading sharply lower Friday morning after the telecom equipment company warned that Q4 results would be weaker than previously expected.For the third quarter, the company posted revenue of 3.80 billion Euros, below the Street consensus at 3.98 billion, and down from 4.07 billion a year ago. Revenues were off 6.8%, or 0.7% in constant currency. Gross profits of 1.38 billion were flat with a year ago.
“We are reducing our costs and increasing our profitability,” CEO Ben Verwaayen said in a statement. “However, we are not at a level we are satisfied with. And given economic uncertainties, we will take more radical actions to accelerate our transformation and reduce quickly our costs structure, especially in Europe. This will generate additional savings in 2012 of 200 million Euros in fixed costs addressing mainly our SG&A spending and 300 million Euros in variable costs addressing mainly project and delivery efficiency.”
He adds that given market uncertainties and selective spending by customers, especially in Europe, the company expects “weaker revenues” than initially expected in Q4. The company now sees adjusted operating margin in the quarter of 4%, down from a previous goal of 5%.
ALU is down 47 cents, or 17.03%, to $2.29.
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