French telecoms gear maker Alcatel-Lucent booked a fresh impairment charge of €3.91 billion ($5.03 billion) in fourth-quarter 2008 reflecting a “drastic deterioration” of the global outlook.
For the fourth quarter, sales came in at €4.954 billion, ahead of analyst expectations. Adjusted EBIT of €297 million was also ahead of the average forecast.
The company confirmed its 2009 earnings outlook for break-even in group adjusted operating profit, as well as for the overall market outlook.
The funded status of pension and other post-employment benefits swung to a deficit of €429 million at end-December, compared with a surplus of €2.997 billion at end-September and the group said it did not expect additional funding through 2010.
Alcatel-Lucent is the third largest global player by market share behind Ericsson and the venture between Nokia and Siemens AG.
“In the fourth quarter, we did what we said we were going to do. I am encouraged by our operating performance, measured by our ability to achieve our top line, operating margin and cash flow targets,” chief executive Ben Verwaayen said in the statement.
“The asset impairment charge that severely impacted our bottom line was made necessary by the drastic deterioration of the global economic outlook during the fourth quarter as well our decision to shift to a more focused portfolio,” he added.
It said that as anticipated, carrier revenues were impacted by some capital expenditure constraints in the fourth quarter, notably in fixed and mobile access.
This was partially offset, however, by the strong performance of other carrier segments such as IP routing, submarine and Next Generation Networks, and resilience of the Enterprise business and solid growth in Services.
At year end 2008, net debt was brought down to €389 million, below the end-June level of €415 million, due to an operating cash flow of €658 million in the fourth quarter.
Alcatel said the divestiture of a stake in Thales for €1.6 billion was proceeding to plan.