AlcaLu Issues Full-Year Profit Warning
AlcaLu had previously said it was on course to improve its adjusted operating margin in 2012 compared with last year. In 2011, the vendor reported adjusted operating income (after one-time costs) of €610 million (US$750 million) and revenues of €15.7 billion ($19.3 billion), giving it an adjusted operating profit margin of 3.9 percent.
The revision sent AlcaLu's share price into freefall on the Paris stock exchange: By mid-morning it was down 14.7 percent to €0.97, giving the company a market value of €2.25 billion ($2.77 billion).
AlcaLu noted that it's set to report a second-quarter adjusted operating loss of about €40 million ($49 million) from revenues greater than €3.5 billion ($4.3 billion) when it unveils its full earnings report on July 26.
In the first quarter the company reported an adjusted operating loss of €221 million ($272 million) from revenues of €3.2 billion ($3.94 billion). (See Bad Start to 2012 for AlcaLu.)
That means for the first half of 2012, AlcaLu will be reporting an adjusted operating loss of €261 million ($321 million) from revenues of €6.7 billion ($8.24 billion), giving it an adjusted operating margin of -3.9 percent.
Based on current orders, the company expects the second half of 2012 to be better than the first, but that will offer little comfort to the company's customers, staff, partners and investors.
What will Ben Verwaayen do next to improve the company's fortunes? So far he has avoided imposing massive cuts to the company's workforce of about 78,000 -- something that Nokia Networks was forced to do -- or selling off core operations. Those options are looking increasingly likely. (See Euronews: AlcaLu Job Cuts on the Cards? and NSN Could Lose More Than 17,000 Staff.)
— Ray Le Maistre, International Managing Editor, Light Reading