By Matt Kapko
Alcatel-Lucent lost more than $373 million during the past quarter the company reported as it announced it would be replacing its chief financial officer. Wall Street appeared relatively pleased with the results, which mostly fell in line with the company’s revised outlook. Alcatel-Lucent's stock was up nearly 3% to $9.67 after the news.
As the company cut around 1,000 jobs during the third quarter its revenues fell 7.8% from the year ago period. The recently combined company has cut more than 5,000 jobs since the beginning of the year and plans to achieve its targeted savings of $867 million through the cuts by year’s end.
“As you can see our results this quarter were essentially in line with the update we provided on Sept. 13, and in a few areas a bit better; however they are still not at a level that we are satisfied with,” CEO Pat Russo said in a statement.
Wireless revenues dipped at least 20% from the year-ago period.
“During the first nine months of operations as a single company, we strengthened our position in key strategic markets and technologies such as IP and mobile broadband required to position the company for long-term sustained growth. Having said that, and in spite of the promise of this industry and the long term benefits of the merger, we recognize that market conditions remain difficult, with continued pressure on revenues and margins due to intensified competition and some slowdown of spending in North America,” Russo added.
The company announced plans to further streamline the organization as it aims to cut costs by an additional $578 million by the end of 2009. Alcatel-Lucent said it will accelerate its ongoing job cuts with an additional 4,000 set to be out of a job by 2009.
“These are difficult but necessary decisions, and we will manage these reductions with care. With this plan, the company is targeting gross margins in the high 30’s and operating margins of 10% or better in the post integration phase beginning 2010,” Russo said.
The company also announced that Hubert de Pesquidoux would be replacing CFO Jean-Pascal Beaufret, who is leaving the company to pursue other opportunities.