Alca-Lu takes new €3.91bn hit

Alcatel-Lucent has taken a new impairment charge of €3.91 billion ($5.03 billion) in Q4 2008 reflecting a "drastic deterioration" of the global outlook, the Financial Times reports.

Fourth quarter sales came in at €4.954 billion, ahead of analyst expectations. Adjusted earnings before interest and tax of €297 million was ahead of the average forecast.

"In the fourth quarter, we did what we said we were going to do. I am encouraged by our operating performance, measured by our ability to achieve our top line, operating margin and cash flow targets," Ben Verwaayen, the chief executive, said in a statement.

"The asset impairment charge that severely impacted our bottom line was made necessary by the drastic deterioration of the global economic outlook during the fourth quarter as well our decision to shift to a more focused portfolio," he added.

The company restated its earnings prediction for 2009, that it would break-even in adjusted operating profit for the group, as well as for the overall market outlook.

Its shares were up 6.6% to €1.56 in early trading.

The statement said that revenues from network operators were affected by some capital expenditure constraints in the fourth quarter, particulary in fixed and mobile access.

It added that these were partially offset by strong performance in other segments including IP routing, submarine and NGNs, and resilience of its Enterprise unit and solid growth in Services.

At the end of 2008, net debt was brought down to €389 million, below the end of June level of €415 million, due to an operating cash flow of €658 million in the fourth quarter.

Alcatel said the divestiture of a stake in Thales for €1.6bn was proceeding to plan.

"With cash and marketable securities of €4.6 billion and the availability of the €1.4 billion credit line, Alcatel-Lucent remains adequately funded," the statement concluded.