Component shortages blight Alcatel-Lucent's first quarter

Alcatel-Lucent is standing by its full-year financial forecasts, despite being blighted by component shortages in 1Q10 that resulted in revenues falling 18.1% quarter-on-quarter, and increased net loss year-on-year
Revenue of €3.247 billion was 9.8% lower than 1Q09, as a shortage of wireless access and terrestrial optics components prevented the firm completing contracts and cashing in on a slight rebound in demand for network equipment during 1Q10.
However, the talk of shortages masks annual falls in revenues at the firm’s other divisions.
Applications revenue was down 6.3% year-on-year to €416 million, and revenues at the firm’s services division fell 3.1% to €772 million.
The falling revenues led to an increased net loss during 1Q10 of €515 million, compared to a loss of €402 million in 1Q09.
 “We are witnessing a recovery in the telecommunications equipment and related services market in some geographical areas especially North America,” CEO Ben Verwaayen said.
“However, we were not able to fully satisfy customer demand for our products due to tightening components availability. This resulted in a weak financial performance this quarter.”
Verwaayen said the weak 1Q performance masked the firm’s “underlying momentum,” but did not change his full-year outlook, which predicts nominal growth of up to 5% in the telecoms business, and adjusted operating margin of between 1% and 5%.

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