AlcaLu blames wider loss on components shortage

AlcaLu blames wider loss on components shortage

Michael Carroll  |   May 07, 2010

Alcatel-Lucent has maintained its full-year outlook despite widening its first-quarter loss.

It said component shortages were partially to blame for the net loss of €515 million ($649m) – down from a deficit of €402 million a year ago. The company’s stock on the NYSE fell 14.24% after the announcement, closing at $2.59. It rose 9 cents in after-hours trading.

The company achieved revenue of €3.247 billion ($4.09b), down 9.8% from 1Q09 and an 18% decline sequentially.

However, the talk of shortages masks annual falls in revenues at the firm’s other divisions.
Applications revenue was down 6.3% year-on-year to €416 million, and services division sales fell 3.1% to €772 million.
“We are witnessing a recovery in the telecommunications equipment and related services market in some geographical areas especially North America,” CEO Ben Verwaayen said.
“However, we were not able to fully satisfy customer demand for our products due to tightening components availability. This resulted in a weak financial performance this quarter.”
Verwaayen said the weak 1Q performance masked the firm’s “underlying momentum,” but did not change his full-year outlook, which predicts nominal growth of up to 5% in the telecoms business, and adjusted operating margin of between 1% and 5%.

Michael Carroll

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