Alcatel CEO to quit after 1.4 billion euro loss

Thu Feb 7, 2013 4:42am EST
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By Leila Abboud

PARIS (Reuters) - Telecom equipment maker Alcatel-Lucent ALUA.PA said its chief executive was leaving after it swung to a net loss of 1.37 billion euros ($1.85 billion) for 2012, hit by lower sales in Europe and China and a writedown of its wireless and optics businesses.

CEO Ben Verwaayen said the company needed a new leader to complete its turnaround when his mandate ends in May.

"If you look at the task at hand, it is focused on execution," said the Dutch-born executive. "Looking in the mirror, I felt maybe that's not my natural strength, and maybe it will be good for the company to get fresh perspective."

The group, which was formed in a merger in 2006, said it would look for a successor internally and externally, and gave no timetable for the appointment.

Since arriving in September 2008, Verwaayen has been unable to deliver on his pledge to return the group to "normal", with steady cash flow and profit.

Its stock has lost 70 percent since then, destroying about 7 billion euros in market capitalization and knocking it out of the French blue-chip index. The European technology index was flat over the same period.

The company's shares were up 7.8 percent at 0908 GMT on Thursday, however, as Verwaayen's departure opened the door to more drastic restructuring of the group.

"Verwaayen's track record has been at best mixed: the group is still posting losses, its position in the market has been eroded, and revenues have shrunk," said Alexander Peterc, analyst at Exane BNParibas.   Continued...

Alcatel-Lucent Chief Executive Officer Ben Verwaayen attends a news conference to present the company's 2012 third quarter sales results in Paris November 2, 2012. REUTERS/Christian Hartmann