Alcatel-Lucent Reports Unexpectedly Bad Results

Alcatel-Lucent  missed revenue expectations, posted a wider-than-forecast loss and cut its 2010 operating margin target, badly hit  by a tough market for telecommunications gear.

Photo: Alcatel-Lucent Reports Unexpectedly Bad Results

Shares fell sharply as the French-American group, which competes with Ericsson, Nokia-Siemens Networks and rising low-cost Chinese companies Huawei and ZTE, cut its 2010 adjusted operating profit margin forecast to 1-5 percent from 5 percent.

"The visibility on the market is a little bit clouded,"  Finance Director Paul Tufano told reporters. "We are being prudent on opening up the range."

Ericsson and Nokia Siemens Networks have declined to predict market growth this year as economic uncertainty makes it tough to gauge the willingness of operators to spend on network gear.

Alcatel-Lucent shares were down 7.4 percent at 1045 GMT, the largest decliner on a 0.6 percent firmer French blue-chip CAC 40 Index .FCHI.

Telecom equipment gear makers suffered last year as telecoms operators cut back their spending on mobile and fixed network equipment to maintain profits as revenues dipped.

Although the outlook has brightened somewhat, few analysts expect demand for telecom gear to fully recover until next year.

Alcatel-Lucent is a global telecommunications corporation, headquartered in Paris, France.

It provides telecommunications solutions to service providers, enterprises and governments around the world, enabling these customers to deliver voice, data and video services.

The company focuses on fixed, mobile, and converged broadband networking hardware, IP technologies, software, and services. 

Alcatel-Lucent has operations in more than 130 countries.

Reuters has contributed to the report.