Verwaayen stands by Alcatel-Lucent guidance

Alcatel-Lucent boss Ben Verwaayen says the company is on track to meet its profit targets over the next year, despite hectic competition in the telecom equipment sector.
 
He told the Financial Times that many of the issues that have stymied the French-US company since its 2006 merger have now been solved, maintained the firm’s optimistic outlook on the rest of the year, and said it could be in a position to issue dividend payments in 2012.
 
The merged company, which has never posted a full-year profit, cut its earnings guidance for 2010 in February, but issued an upbeat forecast in its latest quarterly result, expecting a “strong second half,” with rising sales and continued cost discipline.
 
It predicted sales growth of up to 5% for the telecommunications equipment and related services market for the year.
 
Some analysts are skeptical about whether the company can hit its target of an operating profit margin of 1-5% this year, given strong competition from the fast-growing Chinese vendors, FT reported.
 
But Verwaayen said AlcaLu was expecting network equipment orders from the US in the second half, as well as a return to the market by Indian and Chinese carriers.
 
However, regulatory uncertainty was likely to slow sales in Europe, he noted.

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