Alcatel-Lucent fell nearly 9% after the telecommunications equipment maker slashed its full-year revenue growth forecast and said it expects third-quarter operating profit to be 'around break-even,' an Associated Press report said.
The Associated Press report, quoting a statement, said Alcatel-Lucent expects revenue growth in 2007 to be flat to slightly up at a constant exchange rate.
The company had previously estimated its full-year revenue would grow in the mid-single digit percentage range at a constant exchange rate, the report said.
Alcatel-Lucent said the revision reflects recent discussions with wireless customers in North America, it added.
'Alcatel-Lucent is now seeing a change in capital spending with those customers in 2007, compared to what it had anticipated,' the company said in its statement.
It also said it is 'not seeing the projected volume changes that would have mitigated the ongoing pricing pressures it is experiencing.'
The report also quoted HPC research head Andre Chassagnol as saying that Alcatel-Lucent has had to scale back its expectations because it has been unable to enact its restructuring plan in France and due to recent senior management departures which prevented the group from cutting costs.
The restructuring plan was approved by unions only days ago, Chassagnol said.
Nomura analyst Richard Windsor said he had long said Alcatel-Lucent's full-year revenue target was 'unrealistic,' according to the Associated Press report.
Alcatel-Lucent said it now sees its revenue for the third quarter of 2007 growing slightly compared to the second quarter of this year at a constant exchange rate, the report said.
For the fourth quarter, Alcatel-Lucent still expects its revenue 'to ramp-up strongly over the third quarter.'