Alcatel-Lucent: The French Disconnection

Late last year, I wrote a piece for Bloggingstocks.com on the Alcatel-Lucent merger. Basically, the company's CEO, Patricia Russo, said she would not learn French (even though the headquarters is in Paris). I thought this was a warning sign because it could be a hindrance to managing cultural issues.

Well, it looks like Russo can't speak Wall Street, either.

Today, Alcatel-Lucent announced that it will miss its fiscal fourth quarter. The company expects to break-even (which compares to net income of $739 million in the same period a year ago) and revenues should be down about 16% to $5.72 billion.

Why the meltdown? Well, it could be that customers are holding-off because of the merger.

There is also intense competition, especially from China (such as Huawei). Another big problem is the consolidation of major telecom carriers.

On the news, Wall Street is dumping the stock. The current stock price is down 8% to $13.04.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.