Alcatel-Lucent Plots Another Comeback

June 19th, 2013 by · Leave a Comment

Alcatel-Lucent (NYSE:ALU, news, filings) hasn’t had an easy ride for a very long time, and plans to re-ignite the company’s Franco-American growth engines have come and gone a few times now. This morning the company’s new CEO Michel Combes put forth his own bid to get the job done, entitled ‘The Shift Plan’.

The highlights: €1B in cost savings, a refocusing of R&D on IP and ultra-broadband access, more co-development projects, and selective asset sales of €1B or so that will go toward improving the balance sheet. On the growth front, they plan to grow Core Networking revenues by 15% to €7B annually by 2015 and boost operating margins up to 12.5% or more by then as well. What they won’t do is break the company up via large spin-offs etc.

Will that be enough to make investors happy again? Well, in the short term they seem pleased so far as the premarket is concerned. But given the €2B they lost last year and the continued economic headwinds in Europe, they’ve got a lot of heavy lifting to do before we’re likely to see the real smiles break out.

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Categories: Financials · Telecom Equipment

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