Alcatel-Lucent is still on track despite stock shortages
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Alcatel-Lucent confirms its annual targets despite the impact, for the second straight quarter, problems associated with shortages of components in the industry.
The telecoms equipment has limited the impact of these shortages on its quarterly results and has released figures broadly in line with expectations, but in return it has consumed more cash to stockpile components.
"It's not over yet, we see throughout the industry.But I think we have found a way to better manage (the shortage), "said Chief Executive Ben Verwaayen, during a conference call.
Alcatel expects a surge in demand in the second half and confirmed target for 2010 operating profit of between 1% and 5% of its revenues, while some analysts feared a downward revision of annual objectives Due to shortages of components.
The action has opened up sharply on the Paris Bourse, the head of the CAC 40.At 9:30, the title earned more than 6% to 2.193 euros, compared with a decline of 0.2% of the sector index of technology stocks.
"The second quarter has been impacted by shortages of components, as reported in the first quarter, but to a lesser extent than in competitors Ericsson or CSN," commented an analyst based in London.
Alcatel posted a turnover of 3.8 billion euros for the second quarter, sequential increase by 17.4%, while adjusted operating income stood at 28 million euros.
The net loss per share of 0.08 euro has emerged as reported and adjusted of 0.06 euro.
The Reuters consensus was expecting a turnover of 3.6 billion euros, based on 11 estimates, and adjusted operating profit of 20 million, based on estimates of 9.He expected a net loss per share of 0.03 euro only.
LESS CASH, MORE STOCKS
Several analysts have estimated that the consumption of cash was the main weakness of this publication, also in line with expectations.
"Our stocks rose for the first time in three or four quarters, which meant we had to consume cash," said Chief Financial Officer of Alcatel, Paul Tufano, during the conference call.
Net cash increased to 107 million euros in late June 2010, compared with 512 million at the end of the first quarter, the group said it had registered an increase of 202 million of its need for operating working capital, a stock measure.
"We increased our inventory in anticipation of a surge in demand from our customers in the second half (…), but we will have to focus on optimizing our inventory in the future," said Paul Tufano.
The Franco-American had previously reported in the first quarter from a negative impact of component shortages on its sales, while its rivals Ericsson and Nokia-Siemens Networks had raised these same issues when publishing their results last week .
These components, used in many industries, including automotive and electronics, are affected by a rapid recovery of demand.
"The components industry is not going to solve this problem in a period of 90 days, it's wider than this one (…) Everyone must understand this, "said Ben Verwaayen.