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Wall Street grumbles over Alcatel-Lucent profit warning

Alcatel-Lucent, one of the world’s leading network suppliers, warned that its fourth-quarter revenues will come in below expectations, news that sent investors scurrying away from the company’s shares. Alcatel-Lucent’s stock fell more than 8 percent after the company’s warning to around $13 per share.
Alcatel-Lucent, which attributes a significant part of its business to sales to U.S. wireless carriers, now expects about $5 billion in revenue for the quarter, more than 6 percent less than the $5.33 billion analysts had expected, according to those polled by Thomson Financial Network.
The company now expects its full-year 2006 revenue to be around $16 billion, more than $1 billion less than forecast by financial analysts.
Alcatel-Lucent blamed its sluggish results on its recently competed merger, as well as troubles among its North American customers.
“In addition, the last quarter of the year proved to be challenging from a market perspective, driven by a shift in spending from some of our large North American customers and heightened competition in the global wireless market,” said Patricia Russo, the company’s CEO.
Russo could be referring to AT&T Inc., which recently completed its acquisition of BellSouth Corp. Analysts have recently warned that the deal could be affecting AT&T’s network spending.
Interestingly, Alcatel-Lucent’s lowered forecast didn’t cause Standard & Poor’s Ratings Services to change its outlook on the company. However, financial expectations could be downgraded Feb. 9 when Alcatel-Lucent releases its full fourth quarter and 2006 results.

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