Alcatel-Lucent cuts losses but shares slump

Telecommunication equipment group Alcatel-Lucent said Thursday it cut net losses by more than half in the second quarter as it battles to rebuild after years of setbacks. But its shares plun ged 8.71 per cent to 2.59 euros in morning trading, while the overall Paris market as measured by the CAC 40 index was down 0.87 per cent. Alcatel-Lucent said its quarterly net loss was 298 million euros ($399 million), down from 885 million euros for the same period last year. However, it said the improvement largely reflected the fact that the company had taken a big depreciation charge in the second quarter of last year. By contrast, operating profit rose three-fold to 136 million euros, although sales fell by 4.6 per cent to 3.2 billion euros, which the company said reflected the strategy of restructuring activities for managing services. The gross operating margin, a key measure of basic profitability, was 32.6 per cent of sales, reflecting cuts in fixed costs, the group said, according to AFP.