Alca-Lu CEO says operator spending will fuel turnaround

Alcatel-Lucent (NASDAQ: ALU) CEO Ben Verwaayen is expecting telecom operator spending to increase as carriers play catch-up after the recession and begin to invest in new services and technology.  In addition, the infrastructure vendor's top executive said that he believes this renewed spending will help Alcatel-Lucent get back on track after a series of quarterly losses. Alca-Lu has posted a quarterly profit only twice since 2006, when Alcatel bought Lucent Technologies.

Speaking at Reuters Global Technology Summit in Paris, Verwaayen, who took over the top slot at Alcatel-Lucent in September 2008, said that operators are aggressively pursuing mobile broadband, which means they must invest in new equipment. 

However, investors are skeptical about whether Verwaayen can deliver on his vision--he has said that the company wants to reach an adjusted operating margin of 1 to 5 percent and break-even on cash flow this year. That's a big goal for a company that experienced a disappointing first quarter. Alcatel-Lucent reported a first quarter net loss of $660.3 million, wider than the $515.4 million loss it recorded in the year-ago period. The net loss was more than double what analysts had been expecting. The company blamed the results on a component shortage.  

Verwaayen dismissed concerns over the company's balance sheet and added that the firm has no interest in any major mergers or acquisitions at this time. "I had to deal with complexities as a result of mergers. If I look back where the company spent its energy, it was dealing with complexity," he said. "I wouldn't want to go through that again."

For more:
- see this Reuters article
- see this FierceWireless Q1 earnings page

Related articles:
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