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Pressure Cranks Up On Alcatel-Lucent's Russo
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Shares of telecommunications giant Alcatel-Lucent surged Friday on reports of pressure on CEO Patricia Russo to present a restructuring plan quickly.
Analysts said speculation about a possible Russo resignation was fueling the rise.
The company's stock gained [ALU
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] roughly 4.5 percent to top $10 Friday. The shares traded higher in Paris as well.
Earlier this month, the company lowered its revenue growth projections for the year and said it expected its operating profit to be about break-even for the third quarter.
The company said Friday it was trying to accelerate its integration plans to address problems that led to three profit warnings in less than 10 months, the latest on Sept. 13.
A Financial Times report suggested board members have given Russo a one-month deadline to present a restructuring plan and lay out where the group should focus research and sales efforts.
Russo is being urged to streamline the company's organizational structure, especially the executive committee, which has been top heavy since the merger, the FT also reported.
Alcatel-Lucent officials in Paris would not comment Friday on that and other news reports about pressure on the company's leadership.
In its statement Friday, Alcatel-Lucent said "the company has been working on integration plans and has been looking at ways to accelerate those plans in light of the Sept. 13 announcement."
It added that the company takes "seriously the need to improve the financial performance of the business and is taking the necessary steps."
French business daily Les Echos reported Friday that Alcatel-Lucent board members held an extraordinary meeting Sept. 21, during which Russo said the current cost-cutting program would be expanded and additional jobs slashed beyond the initial 12,500 job cuts announced in February.
Alcatel-Lucent also plans to stop manufacturing some products, it said.
Two board members cited by Les Echos said they will not be able to support the CEO if the company issues another profit warning or if financial results keep deteriorating.
Alcatel-Lucent was created from the merger of Alcatel SA of Paris and Lucent Technologies Inc. of Murray Hill, N.J., completed in November 2006.
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