Alcatel-Lucent to Buy NetDevices, Posts Q1 Losses

Alcatel-Lucent announced today it will acquire NetDevices, a Sunnyvale, Calif.-based private developer of services gateway products for branch office networks, including the SG8 and SG4 unified service gateways.

Terms of the deal were not disclosed. The acquisition is expected in the second quarter, after which NetDevices workers and products will become part of Alcatel-Lucent's enterprise business group. Employees will report to Tom Burns, president of Alcatel-Lucent's enterprise solutions activities.

NetDevices, founded in 2003 by three former Cisco executives, has 45 employees in Sunnyvale and in Bangalore, India.

Alcatel acquired New Jersey-based rival company Lucent Technologies late last year. On Friday, Alcatel-Lucent reported an $8 million loss in its first quarter as a result of the merger. It reported an adjusted first-quarter profit of 199 million euros ($269.2 million) compared with last year's 306 million euros, helped by a 677 million euros ($915.8 million) gain on the sale of assets to French electronics group Thales SA.

Chief Executive Patricia Russo said, "We anticipate solid sequential growth as the year progresses, with our second quarter 2007 revenue expected to grow approximately 10 percent from the first quarter 2007 at a constant Euro/USD exchange rate."

Russo said Alcatel-Lucent is on track to achieve 600 million euros ($811 million) in cost savings for the full year, in line with its target of 1.7 billion euros ($2.3 billion) in pretax savings within three years.

Since the merger, the company has posted two profit warnings while some rival businesses, including Ericsson, sayit is winning market share.

For more information, visit: www.alcatel.com