French-US telecom equipment group Alcatel-Lucent said on Wednesday its net loss widened 48.5 percent to 5.215 billion euros (6.5 billion dollars) in 2008, blaming asset write-downs in a crumbling world economy.
In the fourth quarter alone losses came to 3.892 billion euros in constant currency terms, eclipsing its 3.5-billion-euro loss for all of 2007, the company said.
The 2008 performance was sharply worse than analysts had expected, with Natixis Securities projecting a shortfall limited to 1.245 billion euros.
Alcatel-Lucent shares were nonetheless showing a gain of 5.60 percent to 1.55 euros on a generally stronger Paris market. Analysts said that despite the losses, the company had met financial objectives it had set for itself last year.
“Relatively speaking, given what is happening in the market, Alcatel-Lucent didn’t come out too badly,” said Alexandre Paterc of Exane BNP Paribas.
For 2009 the group said it foresaw a market decline of 8.0 to 10 percent and an operating result that approached the break-even point.
Alcatel-Lucent in the final three months of the year recorded asset depreciations of 3.91 billion euros, bringing the annual total to 4.725 billion.
Chief executive Ben Verwaayen said the fourth quarter write-down “was made necessary by the drastic deterioration in the world economy … as well as by our decision to concentrate on a reduced product portfolio.”
But in a telephone conference, finance officer Paul Tufano insisted that a capital increase was not necessary.
Verwaayen, who took charge in September, said that despite the net loss, Alcatel-Lucent enjoyed “a solid operating performance” in the fourth quarter.
“We did what we said we would do … It’s a very good start.”
The group said it had met its three objectives in 2008 regarding sales, operating profit and operating margin.
Sales came to 16.984 billion euros last year, a slide of 4.5 percent, in line with a projected decline of 2.0 to 5.0 percent.
In the fourth quarter, sales totalled 4.954 billion billion euros, down 7.5 percent from the same period of 2007 and and a gain of 16.9 percent from third quarter 2008.
Adjusted operating profit, which excluded the effects of the acquisition of US group Lucent, came to 466 million euros in 2008 after 110 million in 2007, equivalent to 2.7 percent of sales. The company had targeted a range of 2.0 to 5.0 percent.
Adjusted gross profit was 5.8 billion euros in 2008, or 34.18 percent of sales and within an anticipated range of 34 and 36 percent.
Net debt reached 389 million euros at the end of December compared with 415 million on June 30.