Alcatel posts record loss
Looks to Q2 recovery
Alcatel expects a recovery in its business after reporting a record loss today.
The French telecommunications posted a Q4 net loss of euro 1,498 million compared with a net income of euro 426 million in the same quarter a year earlier. Group sales for Q4 were euro 6,766 million, down 20 percent over pro-forma sales of euro 8,505 million from Q4 2000.
Alcatel lost euro 368 million from its operations after euro 397 million of inventory write offs.
For the full year, group sales came out at euro 25,353 million, down 5 percent compared to 2000 pro-forma sales of euro 26,788 million. Annual net loss in 2001 was euro 4,963 million (slightly below analyst's expectations), compared to net income of euro 1,324 million recorded during the previous year.
Carrier networking, optical, e-business and space segments of Alcatel's operations were all down but the company is in better shape after reducing its debt and going through a painful restructuring process. Around a third of Alcatel's workers, or 33,000 people, have lost their jobs and the firms is planning to sell a number of its factories.
The slowdown on telecomms spending by debt ladened telcos has hit equipment manufacturers hard, but Alcatel predicts the market will recover by the middle of this year.
Serge Tchuruk, Alcatel's chief executive, said it expected its first quarter will be "weak with market softness compounding the usual seasonal effect". Compared to the fourth quarter of 2001 which was up 20 percent sequentially, Alcatel expects first quarter 2002 sales to decline by around 30 percent.
Injecting a note of optimism, Tchuruk added "even if markets remain soft, from the second quarter on we see sequential growth in quarterly sales and income from operations, with the full year income from operations turning positive." ®