Alcatel-Lucent struggles continue as it misses Q2 revenue goals

Telecom equipment maker Alcatel-Lucent (NYSE: ALU) continued to struggle, releasing second quarter earnings that showed a small profit but missed revenue forecasts from analysts, sending its stock price down nearly 10 percent in late-morning Paris trading. The company said it expects to hit full-year goals, which include being profitable for the first time since the 2006 union between French company Alcatel and U.S. firm Lucent formed the new entity.

The company said it earned $62 million in the quarter, beating analysts' estimates and reversing a loss in the like quarter a year ago. The company said sales in the U.S. and Asia of next-generation networking technologies and diminished restructuring charges contributed to the uptick in sales. Sales, however, were up just 2.4 percent, to $5.56 billion, below the $5.7 billion analysts had forecast. Sales were off 2.2 percent in Europe, traditionally one of its strongest regions; North America and Asia showed growth of more than 4 percent.

Analysts said the top-line results and adjusted operating profit were well below consensus.

"The targets for the year are still in reach," said Alexander Peterc, an analyst at Exane BNP Paribas. "We are not in the danger zone yet, but the second half has to go well and the macroeconomic environment isn't great."

Alcatel-Lucent CEO Ben Verwaayen said the company is "on track for the year" and expects U.S. sales to help drive it toward its goal.

"We have a very strong order book in the U.S," Verwaayen said. "We have a diversified business."

Alcatel-Lucent this week announced a more concerted push into the video collaboration market, introducing a suite of tools it believes will help move it up in a market dominated by Cisco (Nasdaq: CSCO) and Polycom (Nasdaq: PLCM).

"Video is just blowing down the doors of enterprise," Joseph Heinen, VP of corporate marketing for Alcatel-Lucent told FierceEnterpriseCommunications, "And much of that comes from the perspective of the personal tools people expect to bring to the workplace, like Facetime and Skype. We think Visual Collaboration will catch the imagination of enterprise workers, too."

For more:
- see this Associated Press story
- see this Reuters article

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