Struggling infrastructure company Alcatel-Lucent swung to a profit in its fourth quarter, but a 20 percent drop in sales and a full-year net loss of $713 million disappointed investors.
The company’s stock fell almost 12 percent in morning trading. Alcatel-Lucent made a profit of $62.57 million, but its fourth-quarter sales came in toward the lower end of its previous revenue guidance at $5.4 billion.
“Revenue came in at the lower end of the indicated range for the year due to the fact that our fourth quarter was not as strong as expected,” said Alcatel-Lucent CEO Ben Verwaayen in a statement. “However, I am encouraged by the strong sequential growth in our orders and by the accelerated traction we are seeing in next-generation technologies, as evidenced by our selection by AT&T as a key supplier for LTE.”
The company saw double-digit sales declines in its carrier segment as revenue dropped off in 2G wireless access, TDM switching, terrestrial optics and broadband access. Growth in the segment’s W-CDMA business helped offset sales declines in the rest of the carrier unit.
Overall, sales in the company’s European market fell 15 percent, while Asia Pacific dropped 26 percent and North America fell 9 percent.
Despite the sales declines, Alcatel-Lucent said it expected the telecommunications market to recover in 2010 as the global economic environment stabilizes. The company expects the telecom market to grow by as much as 5 percent in 2010 and widened its full-year profit estimates to an operating margin of between 1 percent and 5 percent.
Alcatel-Lucent has struggled to make a profit since the merger of Alcatel and Lucent Technologies in 2006.
Filed Under: Infrastructure