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Alcatel-Lucent (ALU)

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  • Jun. 2, 2014, 6:53 PM
    • Alcatel-Lucent (ALU) is issuing €1B ($1.36B) in convertible bonds - a €600M tranche due Jan. 2019, and a €400M tranche due Jan. 2020 - to help pay down a $1.75B credit facility obtained last year as part of a debt restructuring deal with Goldman and Credit Suisse.
    • The convertible offering could eventually lower Alcatel's debt load, albeit at the cost of dilution. The company had €5.5B ($7.5B) in debt at the end of Q1, a quarter for which free cash flow was -$398M.
    • Moody's rates Alcatel's debt B3 - a rating six notches into junk territory. S&P has a comparable B- rating.
    • Previous: Telecom hardware stocks slide on AT&T capex report
    | 2 Comments
  • Jun. 2, 2014, 4:43 PM
    • Jefferies reports AT&T (T -0.1%) significantly cut its wireline capex starting last month.
    • It thinks many companies could be affected, including equipment vendors Alcatel-Lucent (ALU -2.2%), Ciena (CIEN -3.9%), Juniper (JNPR +0.2%), and Adtran (ADTN -5.1%), and component vendors JDS Uniphase (JDSU -2%) and Finisar (FNSR -0.7%).
    • As its is, AT&T's 2014 capex budget ($21B) is down $200M from 2013's spending level. Moreover, the carrier's huge mobile infrastructure needs and the DirecTV deal could be motivating it to cut wireline spend.
    • Also: AT&T may be looking to keep capex down ahead of the full rollout of Domain 2.0, an initiative meant to improve network flexibility, lower costs, and cut provisioning times through the embrace of software-defined networking (SDN) and network functions virtualization (NFV).
    • MKM has argued Domain 2.0 will be a negative for Cisco, but a positive for Ciena and Finisar, among others.
    | 8 Comments
  • May. 22, 2014, 6:08 PM
    • Alcatel-Lucent (ALU -2.8%) is in talks with French security hardware firm Thales to sell its cybersecurity ops. No potential deal price has been given yet.
    • The unit has 90 European employees. Its sale is part of a larger effort to unload €1B ($1.37B) worth of assets by 2015.
    • Many tech companies have been going in the other direction, acquiring cybersecurity startups to address growing enterprise/government interest.
    • Alcatel has thus far announced deals to sell €400M ($548M) in assets, including a government products unit that fetched $200M.
    • Bloomberg reported in January the company is in talks with multiple firms to sell its slumping enterprise hardware/software unit.
    | 5 Comments
  • May. 14, 2014, 5:44 PM
    • Cisco's FQ3 beat, above-consensus FQ4 guidance,, and positive CC commentary are providing a lift to networking equipment rivals and component suppliers.
    • Up AH: ALU +1%. JNPR +1.6%. FFIV +0.8%. FNSR +2%. JDSU +1.5%. RVBD +0.9%. JBL (a major Cisco contract manufacturer) +0.8%.
    • Cisco's product orders were nearly flat Y/Y in FQ3 after falling 4% in FQ2. U.S. orders (+7%, with 10%+ increases in enterprise/SMB orders) provided a boost, as did a 4% increase in Northern European orders.
    • The company's service provider orders fell another 5% Y/Y (router/set-top share loss), but that was better than FQ2's 12% drop. Emerging markets (-7% vs -3% in FQ2) also remained weak.
    | 1 Comment
  • May. 12, 2014, 9:12 AM
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  • May. 9, 2014, 3:42 AM
    • Alcatel-Lucent's (ALU) Q1 net loss narrowed to €73M ($101M) from €353M a year earlier, helped by lower costs and an 11% increase in revenue at the telecom-equipment company's Internet-routing division.
    • Losses per share dropped to $0.03 from $0.16.
    • Revenue fell 3.3% to €2.96B, mainly because of the increase in the euro vs the dollar and a 50% fall to €99M at the firm's managed-services business. Internet-routing sales +11% to €549M, wireless-network fell slightly to €999M.
    • Alcatel-Lucent swung to an adjusted operating profit of €33M from a loss of €179M and beat expectations for break-even.
    • Free-cash flow loss €398M vs €544M, adjusted for discontinued operations.
    • Alcatel-Lucent remains on track to sell €1B in assets.
    • Shares are +3.4% in Paris. (PR)
    | 24 Comments
  • May. 8, 2014, 5:30 PM
  • Apr. 2, 2014, 9:36 AM
    • Alcatel-Lucent (ALU +2.6%) has been upgraded to Buy by French bank Natixis.
    • Fortinet (FTNT +2.6%) has been upgraded to Outperform by Wells Fargo.
    • Veeva (VEEV +5.5%) has been upgraded to Overweight by Morgan Stanley.
    • SouFun (SFUN +2.7%) and Chinese online real estate peer E-House (EJ +3.5%) have been started at Buy by Brean.
    • AppliedMicro (AMCC +2.3%) has been started at Overweight by Evercore.
    | 5 Comments
  • Mar. 27, 2014, 7:13 AM
    • Alcatel-Lucent (ALU) has forged a one-year comprehensive frame agreement worth up to €750M to provide China Mobile (CHL) with technology that will enable the latter to move to an all-IP ultra-broadband network.
    • The deal includes 4G TD-LTE technology, and will pave the way for "future network functions virtualization (NFV) and cloud-based services."
    • Alcatel-Lucent's shares are +6.2% premarket.
    | 15 Comments
  • Mar. 10, 2014, 9:48 AM
    • Alcatel-Lucent (ALU +0.8%) has been upgraded to Outperform by BMO.
    • InterActiveCorp (IACI +1.2%) has been upgraded to Outperform by Cowen.
    • DuPont Fabros (DFT -2.3%) has been cut to Hold by Jefferies following its Yahoo disclosure.
    • Veeco (VECO +8.2%) has been upgraded to Buy by UBS.
    • Evolving Systems (EVOL +3.1%) has been upgraded to Buy by B. Riley.
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  • Feb. 11, 2014, 9:49 AM
    • Alcatel-Lucent (ALU -3.7%) has been cut to Equal Weight by Morgan Stanley four days after rallying in response to its Q4 report.
    • CenturyLink (CTL +2.2%) has been upgraded to Outperform by Macquarie ahead of tomorrow's Q4 report.
    • Sohu (SOHU -4.8%) has been cut to Underweight by Morgan Stanley a day after the company and subsidiary Changyou posted mixed Q4 results and offered weak Q1 guidance.
    • Finisar (FNSR +3.9%) has been upgraded to Buy by Jefferies. Rivals JDS Uniphase and Oclaro have delivered market-pleasing earnings reports in recent weeks.
    • Allscripts (MDRX +2.3%) has been upgraded to Buy by Maxim. Q4 results are due on Feb. 20.
    • Xilinx (XLNX +1.6%) has been started at Buy by MKM.
    | 1 Comment
  • Feb. 6, 2014, 9:15 AM
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  • Feb. 6, 2014, 3:09 AM
    • Alcatel-Lucent (ALU) swung to a net profit of €134M in Q4 from a loss of €1.56B a year earlier, when the company took over a €1B in impairment and restructuring charges.
    • Revenue dropped 4.1% to €3.93B, below forecasts of €4.18B.
    • Adjusted operating profit €307M vs €115M, boosted by higher gross margins and cuts in fixed costs.
    • Operating margin +5 percentage points to 7.8%, an improvement that the company expects to continue.
    • Alcatel said it is on track to reach its 2015 targets of becoming cash-flow positive and sustainably profitable.
    • Alcatel is in negotiations to sell an 85% holding in its enterprise phone business to existing partner China Huaxin after the investment company made a binding offer that gives the business an enterprise value of €268M ($362M).
    • One question might be whether American authorities will approve the sale of the unit, which makes phone systems and other equipment for businesses, given the security concerns that the U.S. has over Chinese telecom gear.
    • The deal is part of Alcatel's strategy to sell at least €1B in assets as it refocuses on its most profitable businesses.
    • Alcatel won't pay a dividend for 2013. (PR)
    | 10 Comments
  • Jan. 23, 2014, 11:22 AM
    • The reaction to Nokia's (NOK -9.4%) Q4 report is very different from the one that followed its Q3 report, as investors worry about a 22% Y/Y drop in NSN sales (follows a 26% drop in Q3) and a 320 bps Y/Y drop in the division's op. margin to 11.2%. Excluding divestments/contract exits, sales fell 15%.
    • NSN's mobile infrastructure sales were relatively healthy, dropping 12% Y/Y to €1.56B after falling 26% in Q3. But its services sales fell 22% to €1.54B, nearly on par with Q3's 23% drop.
    • NSN's sales fell 21% in Europe, 13% in the Middle East & Africa, 23% in Asia-Pac, 38% in North America, and 35% in Latin America. They managed to rise 2% in Greater China (lifted by 4G buildouts).
    • Also: The Here division (mapping/location services) saw a 9% Y/Y sales drop to €254M, and the Advanced Technologies unit (patent licensing/R&D) saw its sales fall 20% to €121M. However, Nokia predicts the business, which could have more negotiating leverage following the Microsoft deal, will produce €600M/year in sales.
    • Mobile infrastructure rivals Alcatel-Lucent (ALU -2.4%) and Ericsson (ERIC -1.9%) are following Nokia lower on a down day for equities. Ericsson reports on Jan. 30, and Alcatel on Feb. 6.
    • Nokia's Q4 results, details/guidance
    | 34 Comments
  • Jan. 21, 2014, 1:42 PM
    • Jefferies' Geroge Notter reports Infinera (INFN -11.5%) has lost a $100M Verizon contract for long-haul optical transmission hardware to Alcatel-Lucent (ALU +0.5%). Infinera was considered the favorite to win the deal, which will make Alcatel Verizon's second long-haul supplier. Ciena (CIEN +3.9%) is the other.
    • Notter reports hearing "pricing was exceedingly low" for the deal, and that this, along with an intervention by Alcatel CEO Michel Combes, helped Alcatel win out even though Verizon's tech people are partial to Infinera's innovative DTN-X transmission platform (previous).
    • Notter: "The anecdote serves as another reminder that the best technology doesn't always win in the Communications Infrastructure space ... Relationships and pricing can go a long way." Infinera is said to have invested heavily in trying to win over Verizon, which would have acted as a major reference account.
    • Possibly motivating Alcatel to price aggressively: The company's optical transport sales fell 1.8% YY in Q3, and have been under pressure for a while. Alcatel reports on Feb. 6, and Infinera on Jan. 29.
    | 6 Comments
  • Jan. 16, 2014, 9:54 AM
    • H-P (HPQ +2.9%) has been upgraded to Buy by BofA/Merrill. Shares are again making new 52-week highs.
    • Alcatel-Lucent (ALU -2.5%) has been cut to Equal Weight by Evercore ahead of its Feb. 6 Q4 report.
    • Micron (MU) has been upgraded to Outperform by JMP. The DRAM/NAND giant received three bullish sell-side calls last Friday, shortly after the company posted a strong FQ1 beat.
    • VMware (VMW +2.7%) has been upgraded to Buy by Citi ahead of its Jan. 28 Q4 report.
    • SunPower (SPWR +3.4%) has been started at Overweight by Oppenheimer. Q4 results are due on Feb. 12.
    • AOL (AOL +4.1%) has been upgraded to Buy by CRT Capital following news it's handing off Patch to a JV.
    • NetSuite (N +1.1%) has been upgraded to Outperform by FBR.
    • Gartner (IT +1.6%) has been upgraded to Buy by Goldman.
    • Emulex (ELX +4.1%) has received a two-notch upgrade to Buy from BofA/Merrill.
    • Verint (VRNT +3.6%) has been upgraded to Outperform by FBR.
    • Vipshop (VIPS +3.1%) has been started at Buy by BofA/Merrill.
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Company Description
Alcatel-Lucent provides mobile and broadband networking services. Its products and services includes Carrier Ethernet access and aggregation switch, Network Intelligence portfolio, and Consulting Services.
Sector: Technology
Country: France