Alcatel-Lucent CEO Steers FIrm To A Lower Loss
It isn't often that a chief executive will be hailed when his company loses $52 million, but that's exactly what happened when Alcatel-Lucent's new chief Ben Verwaayen announced a $52 million loss this week.
The combo U.S.-French firm reported a loss of $51.8 million for its third quarter on a 6.6% drop in sales of $5.15 billion and, because the loss was so much less than last year's $437 million, Verwaayen was praised by investment banking analysts and Alcatel-Lucent stock jumped in early trading.
Verwaayen, a former BT Group chief, took over the reins at Alcatel-Lucent in September and immediately seemed to calm employees and investors. The veteran telecommunications executive gave out his e-mail address to employees and indicated he has read the "truckloads of e-mail" he has received.
The company cited strong performance in its W-CDMA infrastructure as well as in its submarine networks. However, its CDMA business has been declining along with reduced customer spending in fixed access and terrestrial optics technology.
"We met our revenue guidance in a more challenging macroeconomic environment," Verwaayen said in a statement Thursday. "Having said that, our profitability remains unsatisfactory. The gross margin came in at the lower end of our expectations in the third quarter, reflecting an adverse shift in both our product and geographic mixes."
Verwaayen was named to head the company last September after Alcatel-Lucent lost its previous top executives, CEO Patricia Russo and Chairman Serge Tchuruk.
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