Is Alcatel-Lucent Poised to Move Higher?
With shares of Alcatel-Lucent (NYSE:ALU) trading around $3, is ALU an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
T = Trends for a Stock’s Movement
Alcatel-Lucent is a France based company that proposes solutions used by service providers, businesses, and governments worldwide to offer voice, data, and video services to their own customers. It is also engaged in mobile, fixed, Internet Protocol, optics technologies, applications, and services. The company operates in three business segments: Networks; Software, Services and Solutions, and Enterprise. As consumers and businesses continue to connect at an increasing rate, communications companies like Alcatel-Lucent stand to see rising profits. However, the company must adapt to new technologies if they are to see a rising consumer base.
Alcatel-Lucent, the French maker of network equipment, will cut 10,000 jobs as part of a restructuring plan by CEO Michel Combes as he seeks to make the company profitable. The job cuts, which will be completed by 2015, are expected to save Alcatel $1.2 billion, according to Bloomberg. Alcatel has suffered from lower equipment prices, competition with China’s Huawei Technologies, and reduced investment from European wireless carriers. The cuts will happen worldwide and account for 14 percent of the company’s workforce.