Alcatel-Lucent Sees "Soft" First-Quarter Revenue

Alcatel-Lucent reported "soft revenues" for the first quarter on Tuesday, saying preliminary sales fell to around 3.9 billion euros, down 8% from a year earlier at constant currency rates.

The unaudited figure, issued in an unscheduled announcement ahead of formal quarterly results, compares with a market consensus of some 4.05 billion euros held by Reuters Estimates.

The recently merged French-American telecoms equipment group said it expected to post an adjusted operating loss of some 260 million euros in the first quarter, half of which would be attributed to significant items.

"As previously stated, we anticipated that some of the factors which affected our business in the fourth quarter 2006 would continue in the early months of the year leading to some revenue decline," Alcatel Lucent said in a statement.

"In particular, while parts of our businesses performed well, our first quarter results were impacted by lower volumes in traditional wireless and core networks," it said.

Chief Executive Pat Russo told reporters sales volumes were weighed by second-generation wireless activity in emerging markets as well as core legacy products, with the world's telecoms industry upgrading networks more slowly than expected.

"In today's evolution of network markets, customers are all moving ... to IP networks. But that is happening at a slower rate than people had traditionally thought two years ago."

Alcatel Lucent however said it had experienced stronger momentum coming out of the first quarter with a book to bill ratio of 1.3 times at the end of the period.

"(We) remain confident in our ability to resume growth as the year progresses," the company said.

The company, which has announced 12,500 job cuts, also said its restructuring plans were on track with headcount falling by 1,900 by the end of the first quarter and savings likely to feed through to earnings in later earnings periods.

Russo declined to say how many, if any, of those jobs had been cut in France where unions have mounted a legal challenge and the company has found itself in the firing line along with planemaker Airbus over job cuts during presidential elections.

The company said it would post a capital gain of some 780 million euros in the first quarter after the completion of the sale of satellite and other assets to France's Thales.

It declined to give guidance on first quarter net income ahead of full quarterly earnings on May 11.