Alcatel-Lucent's net loss increased in the first quarter of 2009, as sales of both wireless and wireline communications gear fell in markets around the globe due to the economic downturn. The company cited market conditions and continued restructuring efforts for the shortfall.
For Q1 Alcatel-Lucent reported a net loss of $531.56 million, as compared to $181 million a year ago. The company has lost about $11.4 billion over the last nine quarters, and the company doesn't expect to make a full-year profit until 2011.
Sales fell 6.9 percent in the first quarter to $4.8 billion due to a steep drop in sales of wireless gear to North American service providers. The company still expects the global market for telecommunications equipment and services to shrink between 8 to 12 percent this year as compared to 2008.
During a conference call, Alcatel-Lucent reiterated its goal of a break-even adjusted operating profit this year and net income in the second half of 2010, reported Bloomberg News. The company also aims to achieve net income for the full year in 2011,
A reorganization started in December is expected to slash $2.7 billion in expenses over two years and will also bring total job cuts since Alcatel bought Lucent in 2006 to 17,500.
While the company has been affected as the wireless market shifted away from CDMA to GSM, it is winning "massive" deals in China, including a $1 billion contract with China Mobile last month.
R&D spending will be focused on optical, IP, broadband and applications areas, while spending on older technologies will be reduced. In addition the company is cutting manufacturing, supply chain and procurement costs.
Can Ben Verwaayen save Alca-Lu from itself?
Alcatel-Lucent eyes 2010 return to profit - FierceTelecom
Alcatel-Lucent: Another loss, another writedown - FierceTelecom