Merger costs hit Alcatel-Lucent

Telecoms equipment maker Alcatel-Lucent yesterday posted a second-quarter net loss as it continues to grapple with merger costs.

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By  Michele Howe Published  August 1, 2007

Telecoms equipment maker Alcatel-Lucent yesterday posted a second-quarter net loss as it continues to grapple with merger costs.

The company, which was created out of the union of French group Alcatel and its US-based rival Lucent last year, posted an adjusted net loss of US$459.3 million (336 million euros) for the second quarter of 2007 compared to an adjusted profit of 302 million euros for the second quarter of 2006.

The second-quarter loss included a 298 million euro charge related to W-CDMA assets.

2007 was clearly a "transition year" for the company, Alcatel-Lucent CEO Patricia Russo commented on the results.

"We are managing a large, complex integration in an industry that is not waiting for the merger to be completed, and that is obviously putting some short-term pressure on the company," she said during a conference call.

Russo added that 3,800 of the planned cull of 12,500 positions over a three-year period have been cut in the year to date.

Regional representatives told ITP.net earlier this year that they expected any impact of the cuts on the firm's approximately 2,000 staff in the Middle East to be minimal.

The equipment maker said it expects to realise pre-tax savings of 600 million euros this year as a result of the cost cutting measures.

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