Alcatel-Lucent Releases Earnings ... and CEO

When Ben Verwaayen took over Alcatel-Lucent (NYSE: ALU  ) in 2008 – just two years after Alcatel and Lucent were joined at the hip in a $13.4 billion merger deal – he promised to restore dividend payments by 2012 .

Well, 2012 has come and gone ... and still no dividend.

So, on the day that Alcatel-Lucent announced its fourth-quarter and full 2012 earnings, it also announced that Verwaayen will leave his post as CEO once a successor is identified and put in place . Verwaayen will also not seek re-election to the company's board of directors at its annual meeting this spring .

Verwaayen's tenure at Alcatel-Lucent was not helped by the just-released earnings numbers for the company. The quarterly and yearly figures revealed it increased its revenues over the previous quarter by13.8%; yet revenues were down by 1.3% over the same period last year. On a yearly basis, revenues were down 5.7%

The company also had a 2012 net loss of $0.81 a share compared to a net profit of $0.49 a share for 2011. This missed many analysts' expectations of a $0.21 per share loss .

"... [I]t was clear to me that now is an appropriate moment for the Board to seek fresh leadership to take the company forward," Verwaayen said in a company-prepared statement.

A tough year
Last November, Alcatel-Lucent's shares hit a low spot when it was France's most shorted stock , and its shares were trading at close to the lowest price it's been in 23 years -- just under $1.

It was also during November that Verwaayen laid out his plan to bring Alcatel-Lucent back to profitability. During the company's third-quarter conference call, the CEO said that the company would:

  • need to reduce costs by at least $1.65 billion by the end of 2013, which would include laying off 5,500 workers
  • squeeze more income from its large cache of patents
  • re-emerge as an "innovation company, backed by its R&D strength (its 26,000-member R&D staff would be protected from cuts) ."

Since then, the short-sellers have taken a beating as Alcatel-Lucent's share price had jumped as high as 70%, although not on the strength of Mr. Verwaayen's pep talk alone. In mid-December Credit Suisse and Goldman Sachs gave the company a $2.12 billion loan to help it restructure its debt. However, the treasure trove of company patents serve as collateral for that loan.

Alcatel-Lucent's chairman of the board, Phillipe Camus, said the company would be "looking at both internal and external candidates," as a replacement CEO. In the meantime, Ben Verwaayen will still be in charge – at least in title.

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  • Report this Comment On February 08, 2013, at 12:33 PM, Robertlhayes wrote:

    Dan you sleep in on feb 7 I can tell.I was up at 3:30 am for the quarterly.Query What in your article here is usefull information?I not telling you what was said at the quarterly.I see Morgan Stanely must have got up early and made it to the call and came out with a overweight rating today.Morgan Stanely must have heard the same thing I did.Dan do not worry you will be able to hear the call in a week or two and then you will know what we know.long alu

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