Alcatel’s loss widens

Alcatel today reported its loss for the third quarter has increased due to plummeting revenues.

Alcatel’s loss widened to $1.19 billion off of $3.45 billion in revenues, down 37%. For last year’s third quarter, Alcatel posted a profit of $346 million. But Alcatel said it expected a double-digit increase in sales for the traditionally strong fourth quarter, and it had also managed to cut its debt down by 20% to $1.01 billion this quarter.

Even with the expected sales pickup at the end of the year, the future still looks grim, said Chairman and CEO Serge Tchuruk. Overall demand will further decrease next year, Tchuruk said, but with cost-cutting measures in place Alcatel will be able to turn an operating profit next year.

“In this particularly difficult market environment, we are well on our way to establishing a foundation which will allow Alcatel to come out of this crisis financially healthy and strongly competitive,” Tchuruk said.

Sales dropped considerably in all five of Alcatel’s business divisions, but its carrier networking and optics divisions were particularly hard hit. Sales for carrier networking, which includes both fixed and wireless infrastructure, fell 31% from last year due to the slow U.S. DSL market. Alcatel’s optics division saw a 60% drop in sales from year over year, reflecting the chaos in the optical transport industry.