Euronext Paris traded shares of Alcatel-Lucent are down nearly 11% in mid-day trading and have fallen by a similar amount in pre-market U.S. trading on thin volume. The selling is in reaction to the firm's expected adjusted pro-forma breakeven operating profit, compared to a €570 million gain last Q4, on a 16% decline in sales to €4.42b. CEO Patricia Russo cited the impact of M&A activity resulting in short-term uncertainty for customers. MarketWatch reports Goldman Sachs estimates Lucent's Q4 sales were about €1.1b, or 40% below expectations and Alcatel's were 16% short at €3.3b. Alcatel-Lucent said it expects full year 2007 growth "at least at the carrier market growth rate which today we see in the mid single digits." Cost savings for full year '07 are now expected to total €600m, or €200m higher than forecast. Its quarterly earnings release and conference call will take place Feb. 9 before the market opens.
• Sources: Press release, MarketWatch, Reuters
• Related commentary: Jim Cramer's Take - Lightning Round Jan. 4, Goldman: Alcatel-Lucent Shares Have 27% Potential Upside, The Marriage of Alcatel-Lucent: One Step Closer to a Telecommunications Monopoly
• Potentially impacted stocks and ETFs: Alcatel-Lucent (ALU). Competitors: Cisco (CSCO), Ericsson (ERIC), Nokia (NOK), Nortel (NT), Siemens (SI). ETFs: Broadband HOLDRS (BDH), iShares Goldman Sachs Networking (IGN)
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