Boston, MA 11/25/2013 (wallstreetpr) – Franco-American networking equipment manufacturer Alcatel Lucent SA (ADR) (NYSE:ALU) brought some respite to its management and shareholders in its second consecutive quarter by improving losses to $274 million for its third quarter ending September, surpassing analyst expectations a second time. Sales perked up about 1.9% to about $4.97 billion exceeding predictions, while operating profit remains at $157 million excluding special items, compared to a loss of $170.6 million a year earlier. This ensues after second-quarter revenues of $4994 million, albeit with an adjusted gross profit of about $1591 million. Despite this, the struggling conglomerate’s long-running losses stand at over $10 billion in about seven years.
Since the 2006 merger between USA-based Lucent Technologies Inc. and France-based Alcatel, Alcatel Lucent SA (ADR) (NYSE:ALU) saw itself lose significant financial ground and pile up huge losses, while continuing to battle turbulent market conditions and fierce competition from low-cost Asian rivals along with larger competitors Nokia and Ericsson. The consistently loss-making giant is now looking at raising equity funding of about $1.3 billion from shareholders and about $750 million from a high-yield bond in a desperate attempt at rescuing the continually sinking firm. CEO Michel Combes, who unveiled and started massive restructuring activities since June 2013, is pinning his hopes on these efforts last as probably the last to uplift the company’s sagging bottom line.
Under the fundraising, the company plans to sell new shares at $2.8 per share, entailing a discount over the current share price. Combes, who has vowed to cut the ailing company’s debt and earlier emphasized a capital increase, hailed the fundraisings as pivotal and crucial to the recovery. His recently unveiled extensive restructuring plans include focusing on prospective segments like the IP portfolio, apart from laying off 15% of its workforce – around 10,000 jobs. Alcatel Lucent SA (ADR) (NYSE:ALU) shares rose up about 1.77% on NASDAQ from a previous close at $3.95 to close at $4.02 on November 22, with after-hours trading pretty much around the closing figure, recording a high of $4.04 and a low of $4.
