The higher the anticipation of success, the more bitter one feels when they fail. That must have been exactly how Mr. Philippe Camus felt when his company delivered the news of an epic failure, obliterating $558 million from the collective accounts of thousands of shareholders in just one minute. The long-term believers in his company were dealt a punishing blow.
Yesterday Alcatel-Lucent (NYSE:ALU) traded in a volume of nearly 19 million shares and moved up $0.03 but that didn’t do much to recover the staggering losses shareholders have suffered since the company announced last week that it current quarter’s “slower business mix” would mean they wouldn’t be up to par with what the Wall Street gurus were looking for.
It seems that while shareholders got burned really bad, company officers haven’t been doing stellar for themselves either. Alcatel’s latest 20-F quotes a slice of executive salaries equalling roughly 18% that happened in 2011. From the looks of things so far this year, the board of directors may award management with another cut in salary.
The thunder clouds weren’t always hovering above Alcatel. Their reports for the last three quarters of 2011 show that they had consistently beaten the analyst estimations by 100% or more. If they manage to blow the socks off of analysts like that this year, there’s no reason that the stock shouldn’t be able to return to 2011 highs.
For people buying at the current price, a future rebound to 2011 highs would equal huge profits of over 500%.
Alcatel is making some positive steps in the current quarter. Just a few days ago they announced that BT Ireland is to use Alcatel-Lucent’s IP VPN portfolio.
There are still high anticipations for success among the Wall Street analyst community. For Q3, 2012 the consensus is $0.04 in earnings, which would translate into approximately $100 million in solid profits, which sounds to me like a good thing. Hopefully for Mr. Camus, he delivers a 2011-style 100% better than projected performance instead of another first half of 2012-style disaster. After all, there are only so many pay cuts that your bosses can give you before they just give you the boot.
