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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