Alcatel to post another huge loss

PARIS, France (CNN) -- Alcatel, Europe's fourth-largest telecoms equipment maker, expects to post another quarterly loss, the company revealed on Monday.

The Paris-based company said it will have a first quarter net loss of about 850 million euros ($749 million).

Alcatel, which is cutting 30,000 jobs over 2001 and 2002 in an effort to return to profitability, made a 1.5 billion euro loss in the fourth quarter of last year.

Sales are expected to decline 32 percent. Alcatel's chief executive Serge Tchuruk said earlier this year the industry slowdown would likely cut 30 percent off sales in the first quarter of 2002 but business should pick up in the second quarter.

Last year, Alcatel posted a net loss of 4.96 billion euros, compared to a net profit of 1.32 billion in 2000. It was only the second time in its history that Alcatel has ended a year in the red.

Alcatel, along with other equipment makers, has been hit hard by the cash crisis afflicting telecoms operators, whose heavy investment in external growth and new technology in recent years has left them with debt mountains and little to spend on new infrastructure.

Operating results in the first quarter should be "slightly better" than the 368 million euro loss posted in the fourth quarter, the Alcatel said.

Shares of Alcatel, which have fallen by a quarter this year, rose 2.8 percent to 14.84 euros. There had been fears in the market that Alcatel could issue a profit warning after Canadian rival Nortel said last week first-quarter revenue would come in lower than expected due to sagging demand.

Today's statement from Alcatel comes ahead of a weak of earnings from the battered telecom sector. Nokia, the world's biggest mobile phone maker, and No. 2 Motorola are expected to deliver results later in the week.