Alcatel-Lucent's 2008 losses top €5bn

Communications vendor Alcatel-Lucent was hit with an impairment charge of almost €4bn (£3.6bn) during Q4 2008 to leave it reeling from an eighth successive quarterly loss.

Revenue for the three months to the end of December was €4.954bn, a drop of 5.4 per cent on the same period in 2007. Revenue for the whole of 2008 was €16.98bn, a decline of 4.5 per cent year-on-year. Alcatel-Lucent's carrier business accounts for almost three quarters of sales and revenue for this unit plummeted by a tenth last year.

The firm was hit with a goodwill and other intangible assets impairment charge of €3.91bn, leading it to post a net loss of €3.89bn during Q4 2008. Net loss for the entire year stood at a massive €5.22bn.

Chief executive Ben Verwaayen took the reins at the vendor in September after predecessor Pat Russo's embattled reign, which began with Alcatel and Lucent's merger in 2006. After the firm's Q3 2008 results, Verwaayen claimed returning his company to profitability was his primary objective.

Despite this, he claimed that Q4's €4bn write down had been a necessary evil and indicated that he was heartened by Alcatel-Lucent's operational execution.

“In the fourth quarter, we did what we said we were going to do," he said.

"I am encouraged by our operating performance, measured by our ability to achieve our top-line, operating margin and cash flow targets. 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.

"With an improving balance sheet, adequate funding, a new strategy in place and a clear roadmap to profitability, we are committed to executing on our plans to deliver better solutions and services to our customers and better returns to our shareholders."