So telecom equipment maker Alcatel-Lucent
"We did what we said we were going to do," said CEO Ben Verwaayen. "I am encouraged by our operating performance, measured by our ability to achieve our top-line, operating margin and cash flow targets." Those are all noble goals, and Fools especially appreciate management that puts a premium on generating cash.
But those targets were set awfully low. Let's review the "encouraging" performance:
- Sales came in at $6.4 billion. After the fourth-quarter sales haul, the company saw sales drop 4.5% for the full fiscal year. The decline was within the guidance range of "low to mid single digits" sinkage for the year.
- A 6% operating margin in the fourth quarter propped up the full-year figure to 2.7%. Within the "low to mid single digits" margin target, but at the low end of an uninspiring goal.
- That "cash flow" target was really a debt reduction goal, and Alcatel did indeed pay down a bit of its outstanding loans.
Those targets have been known since the last report, and investors have punished the stock for setting the bar at ankle-level. In the last three months, an S&P 500 SPDR
On the bright side, the company actually did produce cash flow from operating activities to the tune of $686 million this quarter. There's also a comfy cash and marketable securities cushion of $5.9 billion to keep Alcatel from meeting Nortel's
But this company is still not keeping Cisco Systems'