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Alcatel-Lucent Message Board

  • tradestoxx11 tradestoxx11 Apr 27, 2013 2:23 AM Flag

    After reviewing the conf. call again and associated financials

    I'm coming up with anywhere from 250M euro's to 350M euros' (latter number includes 100M restructuring charge) that i would label "no big deal...non recurring or won't reoccur for a while) out of the 500M that everyone is so worried about. Meaning.........IMO....that about 150M to 250M Euro is what more accurately reflects the Q1 cash burn as it relates to ongoing operations of this company.

    And this was Q1....the WORST quarter of the year.

    Net cash is coming under pressure AND is DESIGNED to come under pressure as this restructuring proceeds. The goldman loans are intended to pay off their debt and move it ahead by years to ALLOW the cash to come under pressure to pay for the ongoing restructuring and fund whatever weakness there may be quarter to quarter. If you review this in detail however what you should see is that the remaining portion of the performance plan by Q3 and Q4 will be counter balancing what we're seeing now and will see in Q2.

    In other words..that 500M euro remaining SHOULD get us pretty close to even at cash flow neutral for the year. Or, at least in an area where its simply of no real concern.

    Going down the balance sheet i can wipe out in a heartbeat 200M from what everyones worried about.
    operating loss...that should be 20 to 30M better. And, as paul explained in the CC..that's due to the way the company accrues their yearly vacation time.

    Taxes paid. that was for the genysys sale last year. Non recurring? Yea..i think. :)

    Working capital..144M. This simply smoothes itself out over the course of the year and future months will offset this cash burn.

    Interest paid. they're carrying BOTH the goldman loans AND the debt it's designed to pay off.
    Take off 15M right there.

    There's 200M euro folks...right there. Non recurring....
    Add to THAT the 100M restructuring charge...
    are we UP TO 300M YET????????????

    Beyond that..YES. The quarter WAS weak. But guess what? Q3 and Q4 won't be. And it's all in the balance of things. Right?

    ~TS
    jmho

    Sentiment: Strong Buy

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    • First of all, Genysys was sold in 2011 so stop trying to LIE to this people!
      Second, don't be pumping and giving hopes to the people by telling them Q3 and Q4 will be better! Q1 was worse then ever! It is a week quarter but it was way to week! TOO MUCH OF A LOSS!!!!!!
      YOU WILL NOT BE ABLE TO SEE THE Q4!!!!
      ALU has bow left around 1.4B! ALU lives on Lifeline!!!! With this rate, ALU will burn them in the next 2 quarters!

      PEOPLE,
      ALU has been working hard for last 4 years, they knew they were burning money! They knew they need to cut cost!
      THE NEW CEO is just to bring HOPE for people to stay while they file for BK!!!!
      DON"T BE STUPID! THE MARGINS WENT DOWN!!!! 29% versus healthy margins of 60% at JNPR and CSCO
      If ALU did anything or could have done, the margins would have gone better at least!
      BANKRUPTCY IS IMMINENT!

    • Alu can announce tons of contracts and it still comes up with poor revenues,,,,,,it announces huge expense cuts and expenses come in at the same levels,,,,there is a huge misscommunication,,,

      • 1 Reply to buddhazenpeace
      • PEOPLE,
        ALU has been working hard for last 4 years, they knew they were burning money! They knew they need to cut cost!
        THE NEW CEO is just to bring HOPE for people to stay while they file for BK!!!!
        DON"T BE STUPID! THE MARGINS WENT DOWN!!!! 29% versus healthy margins of 60% at JNPR and CSCO
        If ALU did anything or could have done, the margins would have gone better at least!
        BANKRUPTCY IS IMMINENT!

    • Ben lied all the time or maybe he was just ignorant,,,,he said performance prpgram would save alu..it has done nothing,,,,,,,,,totally inadequate...ALU is very slow,,,,,Combes better be a lot quicker,,cause this is a disaster in the making........all those announced contracts,,,,,in qtr 1 and poor revenues,,,what happen to the money_

    • alu completed 750 million in cost cuts,,,,useless,,,,as they did not help at all...

      • 1 Reply to buddhazenpeace
      • That is because if the revenue had remained the same then the saving from the $750M would have made a big difference. In the CC Tufano has said that there were 3200 jobs got eliminated from Managed Services (customer outsourcing) through exiting contracts. This means ALU may have saved $750M but they have also lost revenues from exiting contracts and that is why you are not seeing any dent but perhaps a slight improvement on the "cost of sales". Nevertheless, (imo) the "cost of sales" will have to get down to a 60% (max) from its current 70% of the revenue in order for this company to survive.

    • Yet despite your assessment, Paul acknowledged in the CC that 2013 would be only "slightly better" (I think those are the words he used), than last year....which is not very good....at all...even when excluding the huge 2012 non-cash charge.

      There are a lot of moving parts to 2013, like the patent Q113 licensing fees that were very weak, but are expected to get "materially" better, or like the explanation for, and recovery of, the "few 100 mill" in excess cash burn, or the "expected" improvement in 2H13 in China due to LTE sales. It is sort of difficult to pin these kind of things down, when details are lacking, and when these kind of pronouncements by the company have populated CC's in the past....but often fail to pan out....obviously.

      I honestly think that there were some encouraging signs in the WEAK 1Q report that MAYBE the restructuring was actually gaining traction. And those improvements had better continue Q after Q after Q. Regardless, the company has to expand and accelerate the rate of improvement.

      And while many here have criticized Michel's lack of presence at the CC, I have to disagree. What ALU does not need is more "bluster and hot air". Michel is doing what he should be doing....planning a major overhaul of an inadequate restructuring plan...which he will introduce in June.

      • 3 Replies to rumors_twilight
      • RT....Personally..I take somewhat with a grain of salt whatever Paul might or might not say in terms of projections. I mean..let's face it...one would have really won betting against whatever he "thought" the last few years. Instead..I choose to look at the FACTS he and the company presents and then form my own conclusions. And, not to blow my own horn or anything but for 3 consecutive quarters now I have nailed the EPS before it was released. Including issuing a caution here on this board when NSN's numbers were released. I then became more moderate when Erics was released...made my final call the night before earnings...and that's what we then saw.

        Q1..was weak. I said back in last quarter it would be. I and you had HOPED for something better ..namely -5..but it didn't work out that way. And now i just try to analyze the facts going forward. Q2 will undoubtedly be on the weak side as well..but..i think better. Q3 and 4..i think that with the further cost cuts those two quarters will then offset Q1 and 2..and so it's the whole years blend we should be looking at instead of any one quarter. Paul said we had about 13 to 15M in patent income I think. That's all i'm assigning to it going forward as well UNLESS i see proof that it's increasing. I do believe that the company will complete the remaining 500M Euro cuts this year and that's going to certainly help make this year better than last. I have however lowered my price target down to 1.85 to 2.25 UNLESS management decides to up the cuts THIS year. Personally i think they'll extend them instead of increasing them but we'll see. I think that 5k more employees will be let go. I think the company has to...and that's how they'll reach that 500M euro mark in terms of more cuts. And ..i think we'll wind up being "Ok" this year by Q4. Not great. Just Ok.

        At this point i'm more looking towards years 2 and 3. I think michel has already primed us for that 3 year plan. And lastly..i think we need to give him time to act.

        Sentiment: Strong Buy

      • Rumors,
        Good summary of the conference call and likely short term direction of the company and stock. Michale Combes was correct in not blowing hot air during the cc because he is still trying to wrap his arms around the magnitude of the situation. I do believe we get to profitability by Q4(Feb 2014) if he does what I think he will do.

      • There are a lot of tensions in the market place in France right now, the syndicates are opposed to the idea that so many employees would lose their jobs, but guess what, this quarterly report can actually be providential to the restructuring plan with the arguments that Alacatel is still loosing money and can no longer sustain such a large workforce, cuts will have to be made regardless, to the benefit of the company and its shareholders, this is unfortunate but that's the way the world works.

        On anther topic, the French government, will allocated funds to the company in desperation case scenario, too much at stake regarding French defense system that rely mostly on data from ALU, rest assured that will do the impossible to keep this Co afloat and that's a given!

        Enjoy the weekend!

 
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