Alcatel posts full-year loss: predicts gloomy 2003

4 Feb 2003

Paris-based Alcatel [NYSE: ALA] reported a full-year loss of EUR4.75 billion (USD5.1 billion) and pessimistically predicted that weak demand from operators would continue well into 2003. The vendor, which has slashed its workforce by half to around 60,000 in recent years, said the ‘lower level in world demand for telecommunications equipment, such as experienced in the second half of 2002 should underlie the 2003 pattern for [its] markets’. Alcatel anticipates sales will fall by as much as 25% to 30% in the first quarter, largely as a result of the falling value of the euro against the dollar. In 2002 the company posted revenue of EUR16.55 billion compared with EUR25.35 billion in 2001; fourth quarter sales dipped to EUR4.51 billion from EUR6.77 billion. Alcatel’s full-year net loss of EUR4.75 billion fell short of analysts’ expectations but was better than the EUR4.96 billion reported in 2001. The company has reacted bullishly however, saying that its recent restructuring and cost-cutting efforts would be reflected in its operating loss in Q1 which would be reduced to below the level it recorded a year ago. Alcatel is also scrapping Alcatel Optronics as a tracking stock and looking to convert its stock into ordinary shares. The Optronics division has fared badly since it launched in 2000; it reported a full-year net loss of EUR418.8 million in 2002 against a loss of EUR144.3 million the year before.