The calendar has turned, and the new year has begun. Now... what are you going to do with it? In our 2012 preview series, we're taking a look at some of our favorite stocks, and wondering: Will they do as well this year as last year? Or in Alcatel-Lucent's (NYSE: ALU) case, could they do any worse?

A few Foolish facts about Alcatel-Lucent

2011 Stock Return (47.3%)
P/E 7.0
Dividend Yield None
1-Year Revenue Growth (1.3%)
1-Year Profit Growth 0%
CAPS Rating (out of 5) ***

Source: Motley Fool CAPS.

What's ahead for Alcatel-Lucent?
Alcatel had a pretty miserable 2011, no two ways about it -- but three days into 2012, it's already off to a great start. Yesterday, as markets glowed green around the globe, Alcatel was shining particularly brightly with a 9% gain in share price. Can it keep it up?

As so often in life, the answer is: "It depends." There's no doubt that Alcatel has an opportunity to sell "arms" to telecom superpowers AT&T (NYSE: T) and Verizon (NYSE: VZ), as they race to offer improved cellphone service. AT&T's need for bandwidth to support its iPhone franchise is well-known -- as are the troubles it's had providing this support. Meanwhile, AT&T frittered away a lot of infrastructure-building time while pursuing a merger with T-Mobile and needs to catch up. Verizon, while not distracted by such empire-building hobbies, has added the iPhone to its network, and will need to keep adding capacity to support it.

On the other hand, this is basically the same story we heard last year. And while it's true that at first, Alcatel seemed to be capitalizing upon Big Telecom's need for speed, growing sales smartly in 2011, it never did manage to translate these greater sales into actual cash profits. In fact, last I checked, Alcatel was burning cash at the rate of $565 million per year.

The "B" word
Now, this is not to say that I'm one of the unnamed skeptics that telecom analyst Bernstein was referring to last year when it denied seeing an "immediate bankruptcy risk" at Alcatel. Sure, the company's got more than $5.8 billion in debt -- but it's also got $4.9 billion in cash. At its current rate of value destruction, Alcatel -- which has burned cash consistently for the past half-decade -- can probably go on burning cash for close to another decade before its bank account goes dry. For this reason, I don't see Alcatel going bankrupt in 2012.

I just don't see the stock going anywhere fast, until it gets its cash flow situation fixed.

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