Alca-Lu stung by CDMA weakness

Infrastructure vendor Alcatel Lucent reported its sixth straight quarter of net losses and blamed its troubles on the weak dollar and a slowdown in CDMA equipment purchases. Specifically, the company said that CDMA activity has declined at a higher pace than expected.  Much of this slowdown is due to a reduction in capital expenditures from a key customer in North America. 

The telecom firm reported net losses of $1.73 billion for the quarter. In addition, it maintained its outlook of a 2 percent to 5 percent decline in revenue for 2008 and it expects the overall telecom equipment and services market to remain flat. Revenues for the quarter were $6.45 billion, down 5.2 percent compared with a year earlier.  The company's services business was one area of strength for the firm. The services business had second quarter revenues of $1.27 billion, up from $1.16 billion a year ago.

Alcatel-Lucent has been plagued with troubles since the two firms merged two years ago and now investors and analysts are hoping that a management change will help it turn around.  CEO Pat Russo will leave the company by year-end and chairman Serge Tchurak will step down Oct. 1 (see related story).

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