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Alcatel-Lucent Q2 net loss widens; Qualcomm to buy stake; shares leap

  • Alcatel-Lucent (ALU): Q2 net loss widens to €885M from €254M last year and vs expectations of €280M; operating profit €24M vs loss of €86M and consensus for loss of €39.4M.
  • Revenue +1.9% to €3.61B vs forecasts of €3.48B, with sales boosted by a large increase in revenue from North America.
  • Takes €552M impairment charge related to the reorganization of the company's wireless business and €194M restructuring charge.
  • Cuts €120M in costs, cash burn drops to €248M from €517M.
  • Qualcomm (QCOM) is buying a small stake in Alcatel-Lucent as part of an R&D pact to make new wireless transmitters for homes and offices; ALU plans to seek a total of 3-5 strategic partners that will acquire small holdings.
  • Shares +7.6% in Paris. (PR)
Comments (1)
  • David Jackson
    , contributor
    Comments (1230) | Send Message
     
    I don't get why Qualcomm would buy a stake in ALU. Business deals which involve ownership stakes never seem to make sense for either side.

     

    Partnering at the hip with an ownership stake potentially stops ALU selecting a different supplier in future, and locks QCOM into providing a specific product to ALU which may not make sense for it in the future.
    30 Jul 2013, 04:49 AM Reply Like
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