PARIS: Alcatel’s US acquisition Lucent Technologies Inc. yesterday said it expected a 13 percent decline year-over-year in revenues for the quarter ended June 30 because of shrinking sales in the US and China. The profit warning hit both the companies’ stocks today and share prices tumbled at least 6 percent lower than prices at day opening.

The French telecom giant expects to merge Lucent’s operations with its own before the year ends creating a network infrastructure giant with worldwide presence. It said Lucent’s revised expectations are not going to impact its plans. Alcatel’s own second quarter revenues had been in line with analysts’ expectations and the merger process was on track, it said.

Lucent specified in its statement that revenues for the third quarter ended June 30 had totaled at $2.04bn, 13 percent lower year-over-year. Compared quarterly, the revenues would be 5 percent lower than the $2.14bn earned for the preceding quarter. Based on these estimates, Lucent expects earnings to be around 2 cents a share. The company supplies equipment to telecom carriers.

Lucent’s earnings expectations are nearly 50 percent below the average of analysts’ estimates and 5 cents a share lower than earnings for last year.

A quarter ago, the company had announced its first profit warning for the year. It said it faced difficulties in obtaining licenses in China and India which considerably slowed down the construction of cellular service networks in the two countries.

The company is expected to release its third quarter earnings on July 26.

For Alcatel, the merger with Lucent would help cut costs by at least 70 percent over the next two years, resulting in pre-tax cost savings of upto $1.7bn in the first three years of combined operations. The merger would also mean about 9,000 job cuts which alone would account for 55 percent of the cost savings.

Alcatel acquired the US based company in a deal worth $13.4bn in April