Reuters writes…Alcatel-Lucent (ALU.PA: Quote, Profile , Research) expects a drop in earnings for the fourth quarter but expects to resume growth in 2007, the telecoms equipment maker said on Tuesday.
Publishing preliminary unaudited results, Alcatel Lucent said it expected fourth quarter revenues of around 3.87 billion euros ($5.01 billion) and a fourth quarter reported operating income of around 120 million euros.
The company said that on an adjusted pro-forma basis, Alcatel-Lucent expected fourth quarter 2006 revenue of around 4.42 billion euros, down from 5.25 billion euros in the same 2005 quarter.
Its fourth quarter operating profit is expected to be approximately at breakeven, compared with 570 million profit for the 2005 fourth quarter.
Alcatel-Lucent shares were indicated down 3.65 percent at 0742 GMT in pre-market trading in Paris.
“The headlines look very weak but the risk is that it’s not comparable because they’ve got bits and bobs of Lucent in and bits and bobs out,” one London trader said. “The headlines look awful but they could be better than they look.”
Alcatel-Lucent Chief Executive Patricia Russo said in a statement that the company’s creation from the merger of French group Alcatel and U.S.-based Lucent, along with other merger and acquisition activities, had affected its business.
“In the past few months, these moves created short-term uncertainty for our customers and for our people as we worked to develop the combined company’s product portfolio and new organisation structure,” Russo said.
“This uncertainty together with the work required to close the merger significantly impacted the business,” she added.
The company said its target cost savings of at least 600 million euros for the full year 2007 are 200 million euros higher than initially announced.
“Based on our outstanding combined portfolio of technology and global footprint, we feel confident that Alcatel-Lucent can resume growth in full year 2007, with growth gaining momentum throughout the year, and with a growth rate at least at the carrier market growth rate which today we see in the mid single digits,” added Russo.