Alcatel-Lucent (NYSE: ALU) Tumbles; Margins Shrink; 'Uncertainties' In Europe

Orlando, FL 4/26/12 (StreetBeat) -- Alcatel-Lucent (NYSE: ALU) shares are trading sharply lower following the company’s Q1 financial report.

For the quarter, Alcatel posted revenue of 3.2 billion Euros, down 12.3% from a year ago, or 14.8% lower on a constant currency basis. Revenues were shy of the Street consensus at 3.35 billion Euros. In dollars, revenues were $4.23 billion, while the Street had expected $4.6 billion.

The telecom equipment company reported an adjusted operating loss for the quater of $221 million; free cash flow was -$163 million. Net income was 440 million Euros.

One obvious issue with the quarter was that gross margin fell to 30.3%, down from 35.3% a year ago and 34.4% in the fourth quarter.

“Today’s results reflect a slow start to the year while demonstrating good control on both cash and costs and a strong momentum in our next generation products portfolio,” CEO Ben Verwaayen said in a statement. “But gross margin is not at the level we would have liked. Since the last quarter of 2011, we have been negatively impacted by lower volume and by an unfavorable revenue mix, particularly in services”.

He also noted that “market uncertainties remain high in Europe and the transition from CDMA to LTE is accelerating in North America.”

The company is not changing full year guidance. “We expect to have better visibility on our profitability at the end of the current quarter,” Verwaayen said.

ALU is down 29 cents, or 14.9%, to $1.66.

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Alactel-Lucent (NYSE: ALU) Trading Down 17%

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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