Fundamental Comparisions Between Alcatel (ALU) and Nortel Frightening...

Alcatel-Lucent, S.A. (NYSE: ALU) may be starting to look like the next Nortel Networks.

The stock has tumbled from a 52-week high of $6.63 in May to about $1.60 currently, a drop of 75.9 percent in less than eight months.

Let's do a quick comparison between Alcatel-Lucent and the now-bankrupt Nortel Networks, a company which has been piecemealed over the last two years.

• One of the first lines of Nortel's last quarterly summary read: "Revenues in the third quarter of $1,045 million, with declines year over year in all segments, except Carrier VoIP and Application Solutions (CVAS), and in all regions." Looking back at Alcatel's latest quarter, the company saw declines in (*gasp*) all segments, except Networks IP it's Enterprise segment.
  
• Nortel had gross margins of 45 percent, Alcatel just 36 percent.
  
• Nortel had a net cash balance of $1.81 billion, versus a debit of €620 million at Alcatel.
  
• Alcatel had operating cash flow of (€35) million.
  
• Alcatel's pension liability widened from €49 million in the second quarter to obligations of €1.869 billion.
  
• During Nortel's third quarter ended September 30, 2008 (a year before the company started restructuring), the company had operating margins of 4.3 percent; Alcatel is now aiming for adjusted operating margins of 4 percent.

While this is just a brief summary and merely a quarterly snapshot, the numbers paint a dismal landscape. With Europe accounting for 28.6 percent of Alcatel's revs, and stagnant North America (0.3 percent growth last quarter) accounting for 38.8 percent, investors who haven't exited might want to rethink their strategy.

Or just hope for a little M&A.

Alcatel shares are down 5.5 percent heading into Tuesday's close.

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