Why Alcatel Shares Got Slammed Today

Shares of Alcatel (NYSE: ALU  ) dropped hard on the day, falling 19% in an otherwise positive day for the stock market. The reason? Earlier today, Alcatel contributed to the flood of negative earnings preannouncements that have plagued the broader tech industry of late. The company indicated that it wouldn't hit quarterly expectations, and it retracted its previous operating margin goals for the full year. Reality has been a tough pill to swallow for Alcatel recently, as it fights a war on two fronts between aggresive competition out of Asia and a dampened telecom capital spending environment. In the following video, Brenton dives into the news in more detail, explains why he sees little reason for optimism regarding Alcatel shares, and cautions investors to avoid it for the foreseeable future.

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Brenton Flynn has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Acme Packet and Nokia. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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