European News

30, Jul 2010.

Alcatel-Lucent SA, France’s largest telecommunications equipment maker, confirmed full-year growth targets after posting a second-quarter loss wider than analysts’ estimates.

The net loss in the latest quarter was 184 million euros ($240 million) compared with a profit of 14 million euros a year earlier. Analysts had predicted a loss of 146.2 million euros, according to the average of 13 estimates compiled by Bloomberg. The company reported an adjusted operating profit of 28 million euros, compared with a 62 million-euro loss in 2009.

Chief Executive Officer Ben Verwaayen is betting network investments by phone operators to accommodate devices such as Apple Inc.’s iPhone will help Alcatel return to profit. The company has lost money in all but two quarters since 2006, including a 515 million-euro loss in this year’s first quarter.

“We remain focused on operational execution,” Verwaayen said in the statement. “Further benefits are expected in the coming quarters.”

Sales fell 2.4 percent to 3.81 billion euros, including a 3.4 percent decline in the networks segment, the company said. Alcatel and European rivals Ericsson AB and Nokia Siemens Networks are competing with Chinese companies including Huawei Technologies Co. to roll out so-called fourth-generation wireless networks. Alcatel is supplying the technology to AT&T Inc. and Verizon Communications Inc.

Verwaayen blamed Alcatel’s first-quarter loss partly on a shortage of basic components such as semiconductors, which competitors and chip manufacturers have also said are in short supply. Demand for chips is “very, very strong and we and our competitors are not always able to serve all of the demand,” STMicroelectronics NV CEO Carlo Bozotti said last week.

Motorola Inc. this month agreed to sell its wireless networks unit to Nokia Siemens for $1.2 billion, to expand in North America and Japan. The joint venture between Nokia Oyj and Siemens AG will increase access to more than 50 customers, it said.