There are growing indications that Alcatel-Lucent is increasingly reaping the benefits of its turnaround efforts with reports suggesting the equipment manufacturer could rejoin France's blue-chip CAC 40 index next month.
According to Reuters, the company lost its place on the index a year ago but is now expected to replace struggling chipmaker STMicroelectronics after its stock hit two-year highs.
"Rejoining the CAC would give back visibility to the group and would give credence to the company's turnaround strategy," Frédéric Rozier, management advisor at Meeschaert Gestion Privée, told Reuters.
Alcatel-Lucent also recently said it is seeking to raise around $2.7 billion in fresh capital via a combination of new shares and debt to take advantage of its rising stock price and optimism that it will be able to reverse its business situation.
For the third quarter of 2013, Alcatel-Lucent reported a narrower loss amid rising revenue. The vendor posted a net loss of $273 million in the quarter, narrower than the $431 million loss it had in the year-ago period. Net sales increased 1.9 per cent to $5 billion.
The company's CEO Michel Combes unveiled his restructuring plan, called the Shift Plan, in June when he announced further cost-cutting measures in a drive to become cash-flow positive by 2015. Combes also touted a new slimmed-down organisational structure that will see the company focus on three main segments in order to become a specialist in IP networking and ultra high-speed broadband.
The group plans to focus on high-growth areas such as LTE and high-speed broadband, and to lower fixed costs by more than 15 per cent, saving a total of €1 billion ($1.36 billion).
In October, the company also confirmed it would cut a further 10,000 jobs worldwide by 2015 as part of the Shift Plan, sparking massive protests in France.
For more:
- see this Reuters article
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