CEO Patricia Russo along with Chairman Serge Tchuruk are both leaving ALU. Russo will leave at the end of the year and Tchuruk will leave October 1st. ALU's merger has been characterized by its continued losses and it is not yet apparent whether ALU will finally capitalize as planned on the scale and breadth of the new company's offerings.
ALU signed a $1B deal with China Mobile to provide communication equipment and services.
ALU made a $528 M outsourcing deal with Sunrise Communications. Sunrise is the second largest telecom provider in Switzerland and will outsource its mobile, fixed line, and data networks to ALU.
ALU lost another $282M in the Q1 2008 as it continues to go through a costly merger transition. ALU also expects the semiconductor market to be flat in 2008.
Alcatel-Lucent reduced its 2007 full-year revenue forecast, which resulted in a fall in its share price in the early trading hours. The company expects to break-even in Q3 and predicts flat revenue growth in 2007. The company had earlier announced revenue growth of around five percent in the year. The decrease in revenue outlook was primarily attributed to disappointing sales in the North American region.
Verizon Communications (VZ) signs a $6 billion, three-year contract with Alcatel-Lucent, pulling shares up as investors foresee more stable earnings in the next three years for the newly merged telecom equipment giant.
The stock of Alcatel-Lucent drops by nearly 10% as Chief Executive Patricia Russo warns that uncertainty created by the merger could affect fourth quarter earnings. The merger could cause workers to be uncertain about their jobs and thus be less productive, as well as create fears (between carriers) about how effectively the new giant will produce under a new mix of management styles and dropping worker morale.
The stock price rises because Alcatel-Lucent completes acquisition of Nortel's UMTS technology and a number of related assets. By acquiring technology that Nortel developed, Alcatel-Lucent is taking away their right to use it and expanding its own inventory, thus cutting down competition.