Alcatel-Lucent cuts 2010 target

PARIS, FRANCE: Alcatel-Lucent cut its 2010 operating margin target as it posted lower-than-expected revenues for last year and a wider-than-forecast loss, citing the continued toughness of the telecommunications gear market.

Alcatel-Lucent, which competes with Ericsson, Nokia-Siemens Networks and rising low-cost Chinese low-cost companies Huawei and ZTE, said its adjusted operating profit for this year would be 1-5 per cent, as opposed to the 5 per cent it had previously forecast.

The Franco-American group posted 2009 revenues of 15.16 billion euros, an adjusted loss of 56 million euros, and a net loss of 524 million euros.

Analysts had been expecting 2009 revenues of 15.68 billion euros, an adjusted profit of 269.7 million euros, and a net loss of 472 million euros, according to Thomson Reuters I/B/E/S.

It also posted fouth quarter revenues down nearly 20 percent from a year earlier to 3.967 billion, which was lower than analysts had expected.

Last year was tough for telecom equipment gear makers as telecom 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 confirmed its view that the global telecom gear market would grow 0 to 5 percent this year, which is more optimistic view than its rivals. Ericsson and Nokia-Siemens Networks have declined to predict market growth this year, citing economic uncertainty.