Alcatel-Lucent to unveil turnaround plan today with €2bn cuts
Published: 12 December, 2008
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Continued ...
Although Verwaayen has rejected the notion - supported by some analysts and investors - of quitting the wireless sector altogether, this is certainly ALU's weakest spot, partly because of its over dependence on CDMA, especially in the difficult north American market. Its US performance has been hit hard by a sharp downturn in CDMA investment, which has made some analysts question whether Alcatel dramatically overpaid for the US-based CDMA leader Lucent two years ago. CDMA decline was the main factor behind ALU slashing its outlook and taking an €810m charge in its second quarter this year.
ALU has been lossmaking for seven quarters, since it was created from the $11.4bn acquisition in 2006. Since then the stock has lost 85% in value, against a 38% drop in the Paris CAC40 index.
"The new management team is committed to rapidly executing this new strategy and leveraging the new streamlined organization. We are focused on delivering results and restoring profitability. I am confident we have now the strategy and the strengths to succeed," Chief Executive Ben Verwaayen said in a statement.
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