Alcatel-Lucent CEO Steps Down After Failed Turnaround Bid

by Christopher Freeburn | February 7, 2013 9:04 am

alcatel Alcatel Lucent CEO Steps Down After Failed Turnaround Bid[1]On Thursday, Alcatel-Lucent (NYSE:ALU[2]) announced that its CEO had abruptly resigned[3]. 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.

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[4]. 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[5]. 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.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/01/alcatel.jpg
  2. ALU: http://studio-5.financialcontent.com/investplace/quote?Symbol=ALU
  3. announced that its CEO had abruptly resigned: http://hosted.ap.org/dynamic/stories/A/AP_EU_FRANCE_EARNS_ALCATEL_LUCENT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-02-07-07-15-55
  4. trim its payroll by 5,500 workers: http://investorplace.com/2012/10/alcatel-lucent-shocks-union-with-plans-to-cut-5500-jobs/
  5. earned $1.46 billion in 2011: http://investorplace.com/2012/02/alcatel-lucent-alu-back-in-the-black/

Source URL: http://investorplace.com/2013/02/alcatel-lucent-ceo-steps-down-after-failed-turnaround-bid/
Short URL: http://invstplc.com/1fr0bMg