Alcatel SA, Europe's fourth-biggest phone-equipment maker, had a loss in the second-quarter after taking a 3.2 billion euro (US$2.8 billion) charge to write down the value of inventory and past acquisitions.
Alcatel had a loss of 3.1 billion euros, or 2.74 euros per share, its first since 1995, compared with a profit of 344 million, or US$0.32, a year earlier. The company plans to shed 20,000 employees, or 18 percent of its workforce, this year.
Since Chief Executive Serge Tchuruk failed in a bid to buy Lucent Technologies Inc in May, he's fired about 5,000 workers, farmed out cellphone production, and said he would sell half his factories to cut costs. Alcatel expects sales to fall in the third quarter and full-year sales to be about the same as 2000.
"When you're entering a slowdown, you don't know when it's going to end," said Chief Financial Officer Jean-Pierre Halbron in a conference call.
"We're expecting the telecom market to pick up some time next year."
The announcement came as Krish Prabhu, Alcatel's chief operating officer, said he would leave the company "for personal reasons" on Aug. 31. Prabhu, 46, who was considered a possible successor to Chief Executive Serge Tchuruk, has been named to Alcatel's board.
Shares of Alcatel, trading at their lowest in almost three years, have fallen 72 percent this year compared with a 60 percent drop for Bloomberg's European telecommunications equipment index.
The stock is the worst-performer on the Paris CAC 40 benchmark index this year.
Alcatel and Lucent ended merger talks after disagreeing on how to manage the combined company. A merger may have helped Lucent's recovery by reducing its dependence on US telecommunications companies. Alcatel would have gained more customers, a bigger footprint in the world's largest market and generated billions of dollars in cost savings.
Both Tchuruk and Lucent Chief Executive Henry Schacht have said last month that the companies wouldn't rekindle discussions.
Still, Alcatel said it's been gaining market share in the past quarter.
"When all your rivals report falling sales, except for Nokia Oyj, and our sales rise, then that means we're gaining market share," said Halbron.
Sales in the second quarter rose 4.5 percent to 6.77 billion euros. That excludes the contribution from Nexans, the cable unit Alcatel sold in an initial public offering recently.
Earnings before interest and taxes in the second quarter fell to 136 million euros from 638 million in the year earlier period.
The company's phone networks unit had sales of 3.12 billion euros in the quarter, up from 2.8 billion. Optics sales rose to 2.1 billion euros from 1.7 billion.
Sales at the company's e-business unit, which includes its mobile phone unit and services to businesses, fell to 811 million euros from 1.2 billion in the year earlier period.
The space and components unit had sales of 920 million euros, up from 880 million euros.
DEFENDING DEMOCRACY: Taiwan shares the same values as those that fought in WWII, and nations must unite to halt the expansion of a new authoritarian bloc, Lai said The government yesterday held a commemoration ceremony for Victory in Europe (V-E) Day, joining the rest of the world for the first time to mark the anniversary of the end of World War II in Europe. Taiwan honoring V-E Day signifies “our growing connections with the international community,” President William Lai (賴清德) said at a reception in Taipei on the 80th anniversary of V-E Day. One of the major lessons of World War II is that “authoritarianism and aggression lead only to slaughter, tragedy and greater inequality,” Lai said. Even more importantly, the war also taught people that “those who cherish peace cannot
STEADFAST FRIEND: The bills encourage increased Taiwan-US engagement and address China’s distortion of UN Resolution 2758 to isolate Taiwan internationally The Presidential Office yesterday thanked the US House of Representatives for unanimously passing two Taiwan-related bills highlighting its solid support for Taiwan’s democracy and global participation, and for deepening bilateral relations. One of the bills, the Taiwan Assurance Implementation Act, requires the US Department of State to periodically review its guidelines for engagement with Taiwan, and report to the US Congress on the guidelines and plans to lift self-imposed limitations on US-Taiwan engagement. The other bill is the Taiwan International Solidarity Act, which clarifies that UN Resolution 2758 does not address the issue of the representation of Taiwan or its people in
Taiwanese Olympic badminton men’s doubles gold medalist Wang Chi-lin (王齊麟) and his new partner, Chiu Hsiang-chieh (邱相榤), clinched the men’s doubles title at the Yonex Taipei Open yesterday, becoming the second Taiwanese team to win a title in the tournament. Ranked 19th in the world, the Taiwanese duo defeated Kang Min-hyuk and Ki Dong-ju of South Korea 21-18, 21-15 in a pulsating 43-minute final to clinch their first doubles title after teaming up last year. Wang, the men’s doubles gold medalist at the 2020 and 2024 Olympics, partnered with Chiu in August last year after the retirement of his teammate Lee Yang
The Philippines yesterday criticized a “high-risk” maneuver by a Chinese vessel near the disputed Scarborough Shoal (Huangyan Island, 黃岩島) in a rare incident involving warships from the two navies. The Scarborough Shoal — a triangular chain of reefs and rocks in the contested South China Sea — has been a flash point between the countries since China seized it from the Philippines in 2012. Taiwan also claims the shoal. Monday’s encounter took place approximately 11.8 nautical miles (22km) southeast” of the Scarborough Shoal, the Philippine military said, during ongoing US-Philippine military exercises that Beijing has criticized as destabilizing. “The Chinese frigate BN 554 was
RSS