Alcatel-Lucent (ALU) Slammed Following Dire Q4 Outlook
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Alcatel-Lucent (NYSE: ALU) shares are getting slammed Friday morning following the company's third-quarter earnings report. While Alcatel-Lucent beat expectations, the outlook was muted.
Revenue for Alcatel fell 0.7 percent from €4.074 billion in the same quarter last year to €3.797 billion.
Adjusted net income showed a marked improvement, rising from €25 million in the year-ago quarter to €194 million. Net income per ADS increased from 4 cents to 12 cents per ADS.
The Street was expecting net income of 7 cents per ADS.
Alcatel saw the biggest decline in revs in the Asia/Pacific region, which saw an 18.4 percent drop to €703 million.
Both Networks and Software, Services, & Solutions saw a decline in revs, with Enterprise reporting an 8.9 percent gain.
Looking ahead, CEO Ben Verwaayen offered a more dire outlook. Commenting, "...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 in fixed costs addressing mainly our SG&A spending and €300 million in variable costs addressing mainly project and delivery efficiency.
"For the remaining part of 2011, given these market uncertainties, and selective spending from our customers, especially in Europe, we now expect weaker revenues there than initially planned in the fourth quarter of 2011. Therefore, we now are aiming for an adjusted operating margin of around 4 percent of 2011 sales taking benefit of the fixed costs savings already achieved in 2011, at an exit run-rate level of around €300 million a year."
Alcatel shares are down over 14 percent early Friday.
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Revenue for Alcatel fell 0.7 percent from €4.074 billion in the same quarter last year to €3.797 billion.
Adjusted net income showed a marked improvement, rising from €25 million in the year-ago quarter to €194 million. Net income per ADS increased from 4 cents to 12 cents per ADS.
The Street was expecting net income of 7 cents per ADS.
Alcatel saw the biggest decline in revs in the Asia/Pacific region, which saw an 18.4 percent drop to €703 million.
Both Networks and Software, Services, & Solutions saw a decline in revs, with Enterprise reporting an 8.9 percent gain.
Looking ahead, CEO Ben Verwaayen offered a more dire outlook. Commenting, "...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 in fixed costs addressing mainly our SG&A spending and €300 million in variable costs addressing mainly project and delivery efficiency.
"For the remaining part of 2011, given these market uncertainties, and selective spending from our customers, especially in Europe, we now expect weaker revenues there than initially planned in the fourth quarter of 2011. Therefore, we now are aiming for an adjusted operating margin of around 4 percent of 2011 sales taking benefit of the fixed costs savings already achieved in 2011, at an exit run-rate level of around €300 million a year."
Alcatel shares are down over 14 percent early Friday.
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