Alcatel-Lucent CEO Steps Down After Failed Turnaround Bid

Ben Verwaayen will remain on until a successor is found

   

alcatel Alcatel Lucent CEO Steps Down After Failed Turnaround BidOn Thursday, Alcatel-Lucent (NYSE:ALU) announced that its CEO had abruptly resigned. Investors welcomed the news, sending the telecom giant’s shares up about 4% in pre-market trading.

Ben Verwaayen had headed the company since 2008. He succeeded Patricia Russo, who led the merger that created Alcatel-Lucent in 2006, but was forced out after mounting losses, the Associated Press noted.

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Alcatel-Lucent is currently restructuring operations in a bid to return to profitability. It has announced plans to trim its payroll by 5,500 workers. However, its efforts to turn around operations haven’t succeeded. It missed a 3.9% adjusted operating margin target in 2012, realizing just 2.9%. The company has recorded seven straight years of negative cash flow.

Last year Alcatel-Lucent posted a $1.85 billion loss. It had earned $1.46 billion in 2011. Earnings were dented by a $1.74 billion charge due to the write-down of asset values. Sales fell 5.7% last year.

Verwaayen will remain on as CEO until a successor is chosen.


Article printed from InvestorPlace Media, http://investorplace.com/2013/02/alcatel-lucent-ceo-steps-down-after-failed-turnaround-bid/.

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