Alcatel posts another loss

PARIS, France (CNN) -- French telecom equipment maker Alcatel has issued a gloomy forecast, saying it has not seen any "meaningful" rebound in demand for its products.

The Paris-based company on Thursday posted a first quarter net loss of 836 million euros ($746 million), or 72 cents a share, compared with a profit of 210 million euros, or 18 cents, a year ago. Sales declined 32.7 percent from the previous quarter to 4.3 billion euros.

Alcatel, along with other equipment makers, has been hit hard by the cash crisis afflicting telecoms operators, whose heavy investment in external growth and new technology in recent years has left them with debt mountains and little to spend on new infrastructure.

"Established operator capex reductions (spending on infrastructure) and alternative carriers' financial difficulties, including bankruptcies, and weighing on equipment suppliers," said Chief Executive Serge Tchuruk.

"The industry's sales level remain low and up to now we have not seen any meaningful external signs of a rebound. In fact, we have seen a slowing of activity in Europe, and we can discern no improvement in the Americas."

Alcatel, which is cutting 32,000 jobs globally in an effort to return to profitability, made a 1.5 billion euro loss in the fourth quarter of 2001. Last year it posted a net loss of 4.96 billion euros, compared with a net profit of 1.32 billion in 2000. It was only the second time in its history that Alcatel has ended a year in the red.

Its first quarter operating loss came in at 343 million euros, slightly narrower than the 368 million loss seen in the fourth quarter. The company, the world's fifth-largest telecom equipment maker, reaffirmed its intention to return to profit at the operating level in the second half of the year. Alcatel expects a "slightly positive" 2002 operating result.

The company said second-quarter revenues should show a single-digit increase, with a lower loss from operations.

"The increased operational flexibility that we have put in place at Alcatel allows us to adapt to currently forecasted deteriorated market conditions. As a result, and assuming that these market conditions do not deteriorate even further in the second half, we forecast a slightly positive income from operations in 2002," Alcatel said in a statement.

Shares of Alcatel, which have fallen by a quarter this year, rose 2 percent to 14.60 euros in Paris on Thursday morning on hopes that the firm would meet its operating level forecast.

Alcatel President Jean-Pierre Halbron said the company could not rule out further restructuring but said there were no further job cuts to announce at this stage.

"We have reduced our fixed costs by 450 million euros since the first quarter of 2001, but if necessary more (cost-cutting) plans could be made at the local level. Each unit will decide locally what it needs to do,'' he added.