The firm said it lost $660.3 million in the three months that ended March 31 compared to a loss of $508 million in the same quarter in the previous year. Revenues dropped from $4.55 billion to $4.11 billion. The unexpected declines caused the firm's stock price to plunge more than 11%.
Verwaayen placed most of the blame of the poor performance on a shortage of electronic components that he said held up some key customer deliveries.
"We were not able to fully satisfy customer demand for our products due to tightening components availability," he said, according to media reports. "This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company."
Created by a merger of France's Alcatel and Lucent Technologies in the U.S., the combined company has struggled along with most other large networking equipment makers as competition has increased and business has suffered due to the economic downturn.
Predicting that the firm will turn a profit in the second half of the year, Verwaayen said the company has been working with parts manufacturers to remedy the components supply problem. He also forecast that the combined company will post a profit for the full year next year.
Like other networking companies, Alcatel-Lucent is betting that the boom in smartphones worldwide will translate into more orders and profits for its infrastructure equipment. Verwaayen pointed to a new order from AT&T as evidence of the coming growth in its business. AT&T's popularity with Apple's iPhone has forced AT&T to beef up its network to keep up with iPhone users' demands.
Subsea cable alternatives can provide a level of comfort for those concerned about disruptions. Realistically, they will continue to play a small, but critical role in the short term.
Maintaining existing network infrastructures often incurs huge technical debt before newer technologies are adopted over time.
Amid ongoing regional uncertainties, telecom infrastructure in the Middle East has expand to include terrestrial low-latency network infrastructure, which offers resilience and agility in navigating political complexities without relying solely on undersea networks.
