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Alcatel-Lucent cuts 12,500 jobs ... but pays dividend

Posted Feb 9th 2007 9:12AM by Melly Alazraki (RSS feed)
Filed under: Before the Bell, Major Movement, Earnings Reports, , Alcatel-LucentADS (ALU)

When Alcatel-Lucent (NYSE:ALU) merged last year, creating the world's biggest maker of telecommunications equipment, it said it would slash 9,000 jobs. Now, the company said the number of workers who will lose their job would be 12,500, or 16% or its workforce.

Not surprising, French unions have called for a strike on Feb. 15 to protest the job cuts. Now this could get ugly as Alcatel-Lucent also (surprisingly) announced today that the 2006 dividend will be 16 cents, giving shareholders a dividend yield of 1.1%.

The company also reported -- what Alcatel-Lucent CEO Russo called -- disappointing results, posting a net loss of €618 million ($802.84 million) for the three months ending Dec. 31, compared to a profit of €381 million the previous year. The company expects revenue for 2007 to rise by about 5%.

After rising 4.43% in yesterday's session, ALU shares continued to rise in Paris, gaining 2.8% on the cost cuts and dividend announcement. However, here ALU shares are down 2% in pre-market trading.

Before the bell 2-9-07: Upgrades for Big 3 boosts sentiment

Posted Feb 9th 2007 7:59AM by Melly Alazraki (RSS feed)
Filed under: Before the Bell, Earnings Reports, Analyst Upgrades and Downgrades, Daimler (DAI), Ford Motor (F), General Motors (GM), Employees, Indices, , Alcatel-LucentADS (ALU)

Stock futures are positive in early morning trade, indicating to a similar start for stocks amidst announcement of job cuts and upgrades for the Big Three.

Oil actually rose above $60 a barrel today for the first time since early January. Geopolitical concerns, especially, tensions between Iran and the U.S. as well as cold temperatures boosted oil to above $60 before easing back a bit.

Alcatel-Lucent (NYSE:ALU) announced fourth-quarter earnings this morning, posting a €618 million ($802.84 million) loss and a planned job cut of 12,500 workers. While ALU shares were up in Paris following the announcement, they trade down about 1% in pre-market.

DaimlerChrysler AG (NYSE:DCX) announced today it has sold 7.5% of its shares in Airbus parent company EADS to a private investment group for approximately €1.5 billion ($1.95 billion) in cash. Meanwhile, the Detroit News also reported that the company will cut 7%, or 1,000 white-collar salaried jobs, primarily in Michigan.

The Big Three automakers were all upgraded this morning. Deutsche Bank upgraded General Motors Corp. (NYSE:GM) and Ford Motor Co. (NYSE:F) to buy from hold with new target prices of ~~$11~~ $45 and ~~$45~~ $11 respectively. Citigroup upgraded DaimlerChrysler (NYSE:DCX) to buy from hold just before the restructuring plan for Chrysler Group is unveiled.

Laidlaw International Inc. (NYSE:LI) shares are up more than 8.5% in pre-market about FirstGroup PLC said it agreed to buy the bus company in a 1.9 billion pound ($2.7 billion) deal or $35.25 a share, 11% above Thursday's closing price.

Meanwhile, Gateway Inc. (NYSE:GTW) shares are down nearly 8% in pre-market after reporting earnings yesterday after the close, meeting profit forecast but missing on revenues. The company plans to cut $20 million to $25 million in expenses and lay off more employees.