Thursday, February 8, 2007

Alcatel-Lucent Reports Large Q4 Loss, Announces Further Job Cuts

In its first quarterly financial report as a combined company, Alcatel-Lucent reported Q4 2006 revenue of EUR 4,421 million, a decrease of 16% compared with revenue of EUR 5,249 million in the year-ago quarter (a decrease of 12% at constant at EUR/USD rate). For the quarter, net income (group share) was EUR (618) million, or EUR (0.27) per diluted share (USD (0.35 per ADS), which included the negative impact of EUR (0.26) per diluted share (EUR (577) million) for restructuring charges and impairment of intangible assets.



Citing "challenging market conditions," the company also announced plans to increase the number of layoffs by 3,500, bringing the total number of expected layoffs to about 12,500 over 3 years.



For the full year 2006 Alcatel-Lucent's adjusted pro-forma revenue was EUR 18,254 million, a decrease of 2%, compared with revenue of EUR 18,574(3) million for full year 2005, operating profit(2) was EUR 1,025 million, compared with EUR 1,411(3) million in full year 2005.



Patricia Russo, Chief Executive Officer of Alcatel-Lucent, stated:

"While the results for the fourth quarter are clearly disappointing, the positive long-term benefits of the merger and the growth potential of Alcatel-Lucent remain as envisioned. Since we began operating as a combined company on December 1, 2006, we have made progress against our integration plans, and we expect to increasingly recognize the benefits of our integration over the course of the year.



"Our newly combined company is focused on supporting the overall transformation occurring in our industry. This includes the transformation of networks to all-IP, video and multimedia content to enhance communication services, broadband mobility as well as high value services."

Some additional highlights include:

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