Qualcomm to Take Stake in Alcatel-Lucent

by William White | July 31, 2013 10:51 am

qualcomm logo 300x225 Qualcomm to Take Stake in Alcatel Lucent[1]Alcatel-Lucent (ALU[2]), a French based mobile phone manufacturer and telecommunications company, announced Tuesday[3], that U.S.-based chip maker Qualcomm (QCOM[4]) would take a stake in the company.

The stake that will be taken by Qualcomm is an undisclosed, but small amount. Alcatel-Lucent hopes that other tech investors will follow Qualcomm. The company is looking for three to five investors that will take about a 5% stake in the company. The move to team up with more investors comes after Alcatel-Lucent beat analysts’ expectations for second-quarter profits, reports The Wall Street Journal.

“Alcatel managed a good performance in IP and optics, which translated into sales growth and better than expected gross margin,” Alexander Peterc, an analyst for Exane BNP Paribas in Paris, told Bloomberg[5]. “This good news makes up for the poor cash performance. I expect the boost to the shares will continue.”

Part of the Qualcomm and Alcatel-Lucent partnership has the companies investing more than $750,000 into research. Neither company has disclosed how much it will contribute to the investment, reports WSJ.

ALU shares were up 2% Wednesday morning, continuing a 129% year-to-date increase.

Endnotes:
  1. [Image]: http://investorplace.com/wp-content/uploads/2013/07/qualcomm-logo.jpg
  2. ALU: http://studio-5.financialcontent.com/investplace/quote?Symbol=ALU
  3. announced Tuesday: http://online.wsj.com/article/SB10001424127887323854904578637282946890180.html
  4. QCOM: http://studio-5.financialcontent.com/investplace/quote?Symbol=QCOM
  5. Bloomberg: http://www.bloomberg.com/news/2013-07-30/alcatel-lucent-loss-widens-on-impairment-costs.html

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