Shareholders are increasingly losing patience with Alcatel-Lucent (NASDAQ:ALU) CEO Ben Verwaayen and his ability to turn around the infrastructure vendor, according to a report in the Wall Street Journal.
The report, citing unnamed sources familiar with the matter, said investor pressure on the company's board to replace Verwaayen is high and that recently the board has made informal overtures to potential outside candidates to replace the chief executive. No official outreach has been made though, the report said.
In a statement, Alcatel-Lucent Chairman Philippe Camus said Verwaayen is an "extremely effective" CEO. "In spite of challenging external economic conditions, he is continuing to deliver on the [Alcatel] transformation," Camus said, according to the Journal. "The board, myself and Ben are focused entirely on that task alone."
Since taking over in 2008, Verwaayen has worked to streamline the company's business and return it to growth and profits. However, the company has been weighed down by the 2008 financial crisis as well intense competition from Chinese rivals Huawei and ZTE and, more recently, the sovereign debt crisis now engulfing Europe.
Earlier this month, Alcatel-Lucent lowered its 2011 profit forecast and the company's third-quarter revenue came in lower than analysts' estimates as the vendor said operators were more hesitant to spend amid economic uncertainty, especially in Europe.
The company lowered its full-year 2011 operating margin forecast to 4 percent, 1 percent below its previous target, which sent the company's shares down and led to increased investor anxiety. Verwaayen said at the time that the company "is not at a level we are satisfied with" and also said that amid economic uncertainty, especially with European markets reeling from the debt crisis there, fourth-quarter revenue would be lower than anticipated.
Still, the company has focused on being a leader in specific network technologies, especially LTE. According to the Dell'Oro Group, in the third quarter Alcatel-Lucent commanded 30 percent of the global LTE market, second only to Ericsson's (NASDAQ:ERIC) 44 percent.
- see this WSJ article (sub. req.)
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