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Alcatel-Lucent Hopes U.S. Sales Upturn Will Stop Losses

Alcatel-Lucent turned in another loss in its first quarter, but its chief executive Ben Verwaayen said the firm will be helped later this year by a predicted turnaround in its North American business.

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.

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