Storm Nemo results in empty desks, light activity; Alcatel-Lucent drifts on earnings, CEO exit

By Stephanie N. Rotondo

Phoenix, Feb. 8 - Winter storm Nemo was the topic of the day, leaving little room for any movement in the distressed debt arena on Friday.

"It's definitely a quieter day, I think with the weather," a trader said. He noted that several shops were "missing some staff" and that others were looking to get out early ahead of the looming snowstorm that was expected to hit New England.

"People were thinking about this storm that's coming, so I guess they bailed," said another trader.

With fewer desks manned, volume was thin and most things were trending toward the down side.

"Nothing was really up," a trader said.

Alcatel-Lucent USA Inc. was following the day's trend. On Thursday, the company reported earnings that were less than stellar. The company also said that its chief executive officer was resigning.

Alcatel drifts, CEO exits

A trader called Alcatel-Lucent's 6.45% notes due 2029 down "about a point," trading around 761/2.

Another market source pegged the issue at 76¾ bid, also off a point on the day.

But another trader deemed the issue up fractionally at 763/4, though he added that trading in the name was light.

"So much ado about nothing," he said.

On Thursday, the French telecommunications equipment manufacturer posted a loss of €1.37 billion for the last three months of 2012. That compared to a profit of €868 million a year earlier.

Sales were down 1.4% to €4.1 billion.

Also on Thursday, the company said that Ben Verwaayen, CEO, was resigning. His exit was attributed to the fact that he had failed to turn around the flailing business since he took the post in 2008. Verwaayen had promised that Alcatel would begin paying dividends again by 2012, but failed to achieve that goal.

"With the CEO having lost credibility, we believe that this move will be appreciated, even though a replacement has not yet been named," wrote Eric Beaudet, an analyst at Natixis, in a note to investors.

Verwaayen will continue in the position until a replacement is found.

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