Alcatel-Lucent loses $3.7bn in quarter

Franco-American telecommunications conglomerate Alcatel-Lucent has announced that it made a loss of $3.74 billion in its fourth quarter of the financial year, despite the fact that its sales grew by 18%. The company has decided against paying its shareholders a dividend this year as a result.

Much of that staggering loss was caused by a write-down of its CDMA business. The company has reassessed the value of its division that sells the wireless data transfer technology, and found that it had previously overestimated its worth. Without this and other write-downs, the company’s loss was just $70 million.

Since the merger of Alcatel and Lucent Technologies in December 2006, the combined company has seen its share value fall by $19.5 billion. The plan had been to create $1.7 billion-worth of synergies but despite having cut 16,500 jobs, the cost of the merger still weighs heavily on the company’s balance sheet. This has been exacerbated by a spending slowdown among North American customers.

“There is little doubt that the merger between Alcatel and Lucent has turned into a veritable fiasco,” an analyst for investment bank Dresdner Kleinwort told clients last year.

Further reading

Alcatel-Lucent cuts 4,000 jobs

Alcatel-Lucent hones enterprise focus
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Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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