Alcatel-Lucent Set to Release Q1 Results, Bonds Appear Interesting to Analysts
April 24, 2012
As Alcatel-Lucent (News – Alert) (A-L) gets ready to announce Q1 results this week, there’s an increasing interest in the company’s bonds.
On Thursday, A-L will announce first quarter 2012 results. A conference call and statement will be available from the company for download.
“Alcatel-Lucent has an extensive patent portfolio that could be worth a significant sum of money,” Matt Eagan, a manager at Loomis Sayles & Co., said in a recent statement to Bloomberg News. “The Alcatel story looks attractive from a bondholder’s perspective.”
The company saw net income of 1.1 billion euros ($1.5 billion) for last year, Bloomberg (News – Alert) added. That reverses five years of losses.
“The company has continued to increase profitability since 2009 and had a strong cash-flow performance in the fourth quarter,” Yoann Dupin, a fund manager at Swan Capital Management, told Bloomberg. “It faces strong competitors but they’re making some good innovations, which could be very good for its future financial profile.”
A-L announced its plans to cut some $660 million from costs during 2012. A key focus relates to licensing company patents to generate cash. It has 29,000 patents.
Also, A-L has gotten rid of some of its assets, recently, such as the $1.5 billion deal to sell its Genesys (News – Alert) call-center software unit to Permira Advisers LLP, according to Bloomberg. A-L is hoping innovation, software and new wireless and fixed-line technology will improve its performance during 2012.
“The group’s liquidity position is now very healthy and cash burn has reduced and this will help Alcatel-Lucent meet its debt maturities through to 2015,” Andrei Pashko, a portfolio manager at Deka Investment GmbH in Germany, told Bloomberg.
Bloomberg also reports that A-L’s credit-default swaps dropped some 646 basis points, or 36 percent, according to CMA. That translates to a higher rating than what it now has: B1.
Credit-default swaps on the company’s bonds dropped to 1,138 basis points on Dec. 30 2011. They were 1,784 basis points, according to CMA. http://expertsupportnj.com/2012/04/...appear-interesting-to-analysts/ -----------
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