Alcatel-Lucent shares plunge on big Q3 loss

Shares in the French telecommunications equipment maker Alcatel-Lucent plummeted early on Friday after the group revealed that it had suffered a worse-than-expected net loss in the third quarter of the year. Alcatel-Lucent shares fell by 7.89 percent to 0.76 euros in initial trades on the Paris stock exchange, while the CAC 40 index of leading shares was off by 0.11 percent overall. The group\'s third quarter earnings statement showed a net loss of 146 million euros ($189 million), in part because of an exceptional charge related to the cost of buying Lucent in 2006. Analysts had anticipated a smaller loss of 108 million euros, but were caught off guard by an after-tax accounting adjustment of 34 million euros related to the acquisition of Lucent by Alcatel in November 2006. The tie-up between the two companies has been beset by problems and restructuring. The group said it was \"in the process of studying different alternatives\" to reinforce its balance sheet, after consuming 320 million euros in cash from its treasury. In the three months from July through September, the company also suffered an operating loss of 125 million euros, on sales that slipped by 2.8 percent on an annualised basis to 3.59 billion euros. Analysts had forecast a much bigger drop in sales of 6.5 percent. Company chief executive Ben Verwaayen was quoted as saying: “Our third-quarter results are reflective of the significant transformation we are undertaking both in terms of scope and timing. \"In addition, our revenue growth and gross margin were impacted by overall carrier spending dynamics and product mix, especially in wireless,” he added. The CEO said that since the beginning of the year, Alcatel-Lucent had cut costs by 450 million euros, and was making progress with a plan to shed 5,500 jobs worldwide. It has laid out a plan to find a total of 1.25 billion euros in savings by the end of next year. The company now expects sales by the end of the year, and said its treasury was still well stocked with a total of 4.7 billion euros at the end of September, a figure that was expected to remain positive at the end of the year.