Alcatel-Lucent likely to miss profitability target in 2012

Telecom Lead India: Telecom equipment and solutions major
Alcatel-Lucent said it expects to miss a 2012 profitability target after
posting a second-quarter loss.


The poor financial result is due to weak demand for phone


Alcatel-Lucent said it will not meet its goal for
full-year adjusted operating-profit margin, citing year-to-date performance
and the difficult macro-economic environment.”


Alcatel-Lucent Chief Executive Officer Ben Verwaayen earlier this year said that its 2012 profit
margin would rise.


Alcatel-Lucent is trying to cope with a slowdown in
spending on network equipment and competition from Huawei Technologies,
Ericsson and Nokia Siemens.


The second-quarter adjusted operating loss was about 40
million euros ($49 million), citing slower-than-expected business-mix
improvement. Sales topped 3.5 billion euros.


Alcatel-Lucent is looking to the U.S., Latin America and
Asia for growth, Verwaayen said in an interview in May. Phone companies in the
U.K., Germany, Italy and France have been reluctant to invest as much as their
counterparts in the U.S. and Asia in faster mobile-phone and fixed-line
networks because of Europe’s sovereign debt crisis and unfavorable regulatory


Alcatel-Lucent India revenue dips 41% in 2011


Alcatel-Lucent India has posted 41 percent decrease in
2011 revenue primarily because of uncertainties about telecom investment in the

Alcatel-Lucent CEO Ben Verwaayen has expressed
concerns about uncertainties in Indian telecom market.


Alcatel-Lucent’s APAC revenues were down 4 percent for
the full year. Revenue in China was up 7 percent for the full year. India was
down 41 percent, and Australia was up 14 percent.


Alcatel-Lucent spent EUR 574 million on Capex in


Meanwhile, Alcatel-Lucent is planning to reduce around
1800 jobs its Europe.


The job cutting would be part of longstanding efforts to
reduce costs. Around 20 percent of jobs could be cut in Italy, while the
workforce in France and Belgium are likely to be reduced by around 5 percent
and 10 percent respectively.


Alcatel-Lucent’s plan to reduce its 79,000-strong
workforce follows a similar move by Nokia Siemens Networks, which had recently
mentioned plans to slash its global workforce by 17,000. Meanwhile, Nokia
announced its intentions to cut 4,000 jobs at smartphone making units in Europe
and the Americas, in line with plans to move production to Asia.


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