UPDATE 6-Alcatel-Lucent warns on sales, wounded by merger

(Adds analyst quotes, valuation comparatives, updates shares)

By Astrid Wendlandt and Tim Hepher

PARIS, April 24 (Reuters) - Alcatel-Lucent ALU.PA warned on Tuesday of a steeper-than-forecast drop in first-quarter sales as its transatlantic merger took its toll on sales and margins and trading worsened in emerging markets.

After losing up to 3.2 percent the stock climbed back and gained much as 5 percent as investors' focus moved away from the warning and onto the group's near-term prospects, citing its strong order book and progress on cost-cutting.

By 1358 GMT the shares were up 3.76 percent at 9.65 euros, helped by short covering as hedge funds hurried to buy back shares, traders said.

Preliminary first-quarter sales fell to around 3.9 billion euros ($5.29 billion), down 8 percent from a year earlier at constant currency rates, the French-American telecoms equipment group said in an unscheduled statement ahead of its results.

The figure, described by the company as "soft", came below analysts' average forecast of 4.05 billion euros in a Reuters Estimates poll where estimates ranged from 3.8 billion to 4.3 billion.

The world's second-largest supplier of telecoms and mobile equipment said it would incur an adjusted operating loss of about 260 million euros for the first quarter.

Half of that would be related to "unusual significant items", which it declined to reveal before the full publication of first-quarter results in May.