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By Joey Gardiner, 26 July 2001 18:33

NEWS French hardware giant Alcatel has cheered investors with its quarterly results, despite showing a multi-billion pound loss and laying off 14,000 staff. The global telco equipment maker received a warm welcome from the market, which is indicative of the depths the market has reached in recent months. Alcatel reported a loss of E3.1bn (£1.9bn) on revenues of E6.8bn (£4.2bn). Investors were impressed that the firm managed to post a modest operating profit of E136m (£84m). The net loss was created by a whopping E3.2bn (£2bn) write-off for restructuring charges, acquisition costs and lost goodwill. The company also announced the resignation of its COO Krish Prabhu, who has decided to step down for personal reasons. CEO Serge Tchuruk said the outlook for the future is uncertain, and indicated the US recession has already hit the UK, but has so far been evaded by continental Europe. Nomura communications equipment analyst Richard Windsor said the apprehension of a recession in the UK was just a reflection of the fact that BT had stopped buying new kit, while Deutsche Telecom, and other incumbent European telcos, are still spending. Windsor said the results were good: "It shows Alcatel is in the right areas with the right products. However, the loss of Prabhu is concerning. He led the entire telco strategy and helped build the US operation. He will be hard to replace." In a separate statement Prabhu said he wanted to spend more time with his family in Dallas. There has been some speculation Prabhu may be clearing the decks to run for the top job at Nortel Networks, where the CEO John Roth is due to step down in April 2002.