A-L losses widen on component shortage
Alcatel-Lucent’s losses widened in the first quarter after the company was unable to meet demand due to a shortage of electrical components in its networks division.
The struggling infrastructure giant, which has only posted two quarterly profits since its creation in 2006, said it lost 515 million euros ($655.3 million) in the first quarter of 2010. Sales fell 9.8 percent to 3.24 billion euros, or $4.13 billion.
“[We] were not able to fully satisfy customer demand for our products due to tightening components availability,” said Alcatel-Lucent CEO Ben Verwaayen. “This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company.”
The component shortage was partially accountable for a 13 percent drop in sales at Alcatel-Lucent’s networks division, the company’s largest segment. Network equipment sales fell to $2.45 billion from $2.83 billion after a shortage of components for wireless access and terrestrial optics hit Alcatel-Lucent’s supply chain.
On a geographic basis, Alcatel Lucent saw sales increase 6 percent in North America, but revenue suffered across the rest of its regions. Sales fell 9 percent in Europe, 19 percent in Asia Pacific and 23 percent in the rest of the world.