Alcatel-Lucent Releases Earnings ... and CEO
Feb 7th 2013 7:00PM
Updated Feb 7th 2013 8:50PM
When Ben Verwaayen took over Alcatel-Lucent in 2008 - just two years after Alcatel and Lucent were joined at the hip in a $13.4 billion merger deal - he promised to restore dividend payments by 2012 .
Well, 2012 has come and gone ... and still no dividend.
So, on the day that Alcatel-Lucent announced its fourth-quarter and full 2012 earnings, it also announced that Verwaayen will leave his post as CEO once a successor is identified and put in place . Verwaayen will also not seek re-election to the company's board of directors at its annual meeting this spring .
Verwaayen's tenure at Alcatel-Lucent was not helped by the just-released earnings numbers for the company. The quarterly and yearly figures revealed it increased its revenues over the previous quarter by13.8%; yet revenues were down by 1.3% over the same period last year. On a yearly basis, revenues were down 5.7%
The company also had a 2012 net loss of $0.81 a share compared to a net profit of $0.49 a share for 2011. This missed many analysts' expectations of a $0.21 per share loss .
"... [I]t was clear to me that now is an appropriate moment for the Board to seek fresh leadership to take the company forward," Verwaayen said in a company-prepared statement.
A tough year
Last November, Alcatel-Lucent's shares hit a low spot when it was France's most shorted stock , and its shares were trading at close to the lowest price it's been in 23 years -- just under $1.
It was also during November that Verwaayen laid out his plan to bring Alcatel-Lucent back to profitability. During the company's third-quarter conference call, the CEO said that the company would:
- need to reduce costs by at least $1.65 billion by the end of 2013, which would include laying off 5,500 workers
- squeeze more income from its large cache of patents
- re-emerge as an "innovation company, backed by its R&D strength (its 26,000-member R&D staff would be protected from cuts) ."
Since then, the short-sellers have taken a beating as Alcatel-Lucent's share price had jumped as high as 70%, although not on the strength of Mr. Verwaayen's pep talk alone. In mid-December Credit Suisse and Goldman Sachs gave the company a $2.12 billion loan to help it restructure its debt. However, the treasure trove of company patents serve as collateral for that loan.
Alcatel-Lucent's chairman of the board, Phillipe Camus, said the company would be "looking at both internal and external candidates," as a replacement CEO. In the meantime, Ben Verwaayen will still be in charge - at least in title.
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The article Alcatel-Lucent Releases Earnings ... and CEO originally appeared on Fool.com.Fool contributor Dan Radovsky has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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