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Alcatel-Lucent Q1 loss widens as sales fall 7% to $4.8 billion

Incurred restructing charges of $998.4m related to cost-reduction plan

By CBR Staff Writer

Telecoms equipment company Alcatel-Lucent has reported a net loss of E402m ($535.1m) for the first quarter 2009 against a loss of E181m ($241m) in the same period last year, on revenue down 7% to E3.6 billion ($4.8 billion).

It made an operating loss of E326m ($434m) against E106m ($141.1m) last year.

It also incurred restructuring charges related to a E750m ($998.4m) cost-reduction plan, which included cutting 1,060 jobs in the quarter.

It said carrier revenue declined 14% to E2.21 billion ($2.9 billion) while application software grew 13.3% to E255m ($339.4m). Enterprise revenue fell 17.5% to E245m ($326.1m) and services revenue increased 20.6% to E797m ($1.06 billion). Revenue from others contributed E82m ($109.1m).

Geographically, revenue from North America fell 17% to E1.11 billion ($1.47 billion), while Asia Pacific declined 3% to E649m ($864m) and Europe fell 2.5% to E1.24 billion ($1.65 billion). Revenue from rest of the world grew 2% to E588m ($783m).

Ben Verwaayen, chief executive at Alcatel-Lucent said: As we discussed before, 2009 will be a year of transition. We are reshaping the company and aggressively pursuing our product portfolio rationalization, co-sourcing, working capital management and SG&A reduction programs. Our guidance for the year remains unchanged and we are taking appropriate actions.

The company expects the global telecoms equipment and services market to be down between 8% and 12% at constant currency in 2009. It anticipates an adjusted operating profit around break-even in 2009.

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