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Alcatel-Lucent Loses $531 Million, Re-Shuffles Product Mix

Among wireless technologies it has earmarked for investment: LTE, WCDMA, and converged radio-access networking.
Alcatel-Lucent reported a first quarter loss Tuesday of $532 million as the merged company recorded its ninth straight quarterly loss.

Even so, chief executive Ben Verwaayen assumed an upbeat stance, noting that 2009 is a transition year. In a statement, he said: "We are reshaping the company and aggressively pursuing our product portfolio rationalization, co-sourcing, working capital management, and SG&A reduction programs. While expected, given seasonality and tough market conditions, we are not pleased with the operating loss."

The company also listed technologies earmarked for investment and others where it sees less market opportunity. For instance, Alcatel-Lucent plans to boost investment in next-generation wireless segments including LTE, WCDMA, and converged radio-access networking.

In fixed-access technologies, the company plans to increase spending for IP segments including service routers, carrier Ethernet, evolved packet core, and IMS while also boosting investment attention in some optics technologies.

Mobile WiMax and CPE technologies will receive reduced investment attention, Alcatel-Lucent indicated.

Alcatel-Lucent is just the latest networking infrastructure company to be caught by sliding financials. Nortel Networks is in bankruptcy, Motorola and Ericsson are struggling with slowing sales, and last week Nokia Siemens Networks said it expects to see a 10% decline in demand for network infrastructure products and services.

Like its network infrastructure competitors, Alcatel-Lucent has been relying on substantial job cuts to improve its sagging financial position. By the end of the year, the company expects to have eliminated some 16,000 positions out of the 76,000 it had two years earlier.

Verwaayen cited an "encouraging increase in our order intake in both North America and Asia Pacific" regions. The company has been betting that its Converged RAN (radio-access network) offerings that simultaneously support CDMA and LTE will boost its sales as wireless carriers switch to LTE.


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