Uncommon Wisdom

Feb 8 2008   2:26PM GMT

Alcatel-Lucent losses indicate management change?



Posted by: Tom Nolle
Tags:
Alcatel-Lucent
Metro Area Networks

Alcatel-Lucent posted another loss, warned on the current quarter, and suspended dividend payments, all of which will almost certainly lead to a management shakeup. The company is suffering under a mobile spending slump that has also hurt some of its competitors, and is unlikely to lift for the balance of 2008. Despite the publicized success of its IPTV strategies, it has also been unable to make the revenue shortage up with broadband success, and there is now indication that it’s shifting strategies to a more generalized access and metro strategy that would offer lower-cost deployment. Recent emphasis on DSL and PON are examples of this trend. We believe the company has little chance of pulling out of the current slump in 2008 even with a management change, and that some major restructuring and cost-cutting will be forthcoming

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