Optical/IP Networks

AlcaLu: No 'Cisco Effect' for Us

Alcatel-Lucent (NYSE: ALU) CEO Pat Russo says her company isn’t experiencing the current slowdown in North American orders that Cisco Systems Inc. (Nasdaq: CSCO) warned investors about earlier this week. (See Cisco Sounds Warning Bells.)

Responding to analyst questions during today’s fourth quarter earnings conference call, Russo said the forecast AlcaLu has made for its first quarter revenues -- expected to be between 20 percent and 25 percent lower than the fourth quarter’s €5.23 billion ($7.6 billion) -- is “nothing to do with the comments that Cisco made.” (See AlcaLu Reports Q4 Loss of €2.6B.)

Russo said that the expected dip in sales was seasonal, and that Alcatel, in past years, had experienced such a drop from fourth to first quarters.

AlcaLu’s new CFO Hubert de Pesquidoux added that AlcaLu had a “good backlog” of business at the end of the fourth quarter. (See Russo Shakes Up AlcaLu's Top Team.)

AlcaLu can well do without the sort of impact Cisco is noticing: Russo expects continued tough trading and market conditions during 2008, with full year sales expected to be slightly down on 2007’s €17.79 billion ($25.8 billion).

The vendor’s share price ended the day in Paris at €4.14, up 1 euro cent.

— Ray Le Maistre, International News Editor, Light Reading

ethertype 12/5/2012 | 3:48:07 PM
re: AlcaLu: No 'Cisco Effect' for Us Cisco US slow-down is all enterprise; SP is cooking along just fine. Last I checked, AlcaLu gets <10% of its revenue from enterprise. So why would they see the same outlook as Cisco? Typical LightReading trying to create news out of nothing.

The real AlcaLu news is that they still can't figure out how to turn a profit and had to take a 2.5Bn Euro "goodwill impairment charge" (read: we finally had to admit that we're worth a lot less than we said). This on top of the almost 1Bn in restructuring charges for the year.
Mostly Harmless 12/5/2012 | 3:48:06 PM
re: AlcaLu: No 'Cisco Effect' for Us Hi ethertype,
I fully agree with your assessment of the enterprise/SP situation.

But it's hardly Light Reading's fault if Russo failed to point that out in her statement. Isn't this a case of Light Reading reporting the facts, and resisting the temptation to analyze them?

Isn't embellishment something for which they've been criticized on these board in the past?

Stevery 12/5/2012 | 3:48:04 PM
re: AlcaLu: No 'Cisco Effect' for Us The real AlcaLu news is that they still can't figure out how to turn a profit

That's not news. That's just expected.

And it will continue to be expected until there is a large-scale housecleaning of the top layers.

But again, anyone who is suitable for the job would be smart enough to stay the hell away from it. So we get to watch pat will run it into the ground.

In other Q's, has anyone kept track of the total value destruction since pat took over? I lost count after the merger complications.
MorningWd 12/5/2012 | 3:48:03 PM
re: AlcaLu: No 'Cisco Effect' for Us I think that ALU officially began on December 1, 2006. The closing price that day was $13.36. The latest closing price was $6.00, giving ALU a current market cap of $13.55B. With my trusty HP15C in hand, I would say that, under Pat's leadership, ALU shareholders have now lost $16.62 Billion.

What could one do with that $16.62B today?
1. Buy all of ALU right now (with $3.07B left over).
2. Follow President Bush's plan and stimulate the economy for the next 36 days.
3. Assure yourself a Powerball win by covering down on all of the combinations 113 times.

I'm sure that there are better uses for this money, but that is what came to mind for me.

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