Telecommunications equipment maker Alcatel-Lucent cut its full-year revenue forecast on Thursday, sending its shares down by nearly 10 percent and adding further pressures to the recently merged group.Alcatel-Lucent said it had seen a change in capital spending among its wireless customers in North America, which meant it had not compensated for lower sales prices with higher volumes of sales.
Alcatel-Lucent now expected 2007 revenue growth to be flat to slightly up, at constant exchange rates. It previously forecast that revenue would grow in the mid single-digit percentages at constant rates.
The company also projected around a break-even third quarter.
Alcatel-Lucent shares on Thursday fell as much as 9.7 percent to an intraday low of $8.97 (6.55 euros). The stock was the top loser on France's benchmark CAC-40 index and was down 8 percent in early morning trade.
"Once again, it's a profit warning," said Agilis Gestion fund manager Frederic Hamm.
"We're not going to get into the stock because of the profit warning problems, even if the sector looks attractive and the stock is at an attractive level," added Hamm.
Profit warnings
Alcatel-Lucent was created in December by the takeover of U.S-based Lucent by France's Alcatel, but the new group has been dogged by merger-related costs and uncertainty over product integration.
The latest cut to its revenue forecast comes after Alcatel-Lucent issued a profit warning in January and then followed up with a sales warning in April. Rumors of a new profit warning had caused Alcatel shares to fall at the end of last week.
Alcatel-Lucent said it was continuing to work on its integration plans and its target for synergy-related pretax savings of $832 million this year.
"While the company acknowledges that it is competing in a challenging market environment and executing a complex merger, it remains confident that it has the right combination of people and assets to position the company as a leading player in the industry," Chief Executive Patricia Russo said in a statement.
Alcatel-Lucent is the market leader for fixed-line network equipment and associated services, but lags Ericsson in wireless hardware.
Cutthroat competition from Ericsson and other rivals has forced Alcatel-Lucent
The technology sector was also under pressure after U.S. chipmaker Texas Instruments barely changed its current quarter revenue and earnings forecasts earlier this week, disappointing investors who had hoped for a raised outlook.
Based on latest prices, Alcatel Lucent shares have fallen by around 40 percent since the start of 2007, making them one of France's worst performing blue-chip stocks.
