Alcatel-Lucent reports net profit of €43m

28 Jul 2011

Second-quarter revenues increased for telecommunications equipment supplier Alcatel-Lucent, to €3.903bn, a rise of 2.4pc from the previous year.

Alcatel-Lucent generated an adjusted operating profit of €108m, versus a loss of €45m a year earlier, giving it a margin of 2.8pc.

Net profit was €43m or 2 cents a share, versus a loss of €18m or 8 cents a share a year ago.

The company reiterated its outlook for the full year, to grow faster than its addressable market and reach an adjusted operating margin more than 5pc.

“We are on track for the year. In the second quarter,our next-generation product sales increased sharply, delivering market share gains in IP and optics, driven by the need for capacity and all-IP network transformation. From a geographic standpoint, we enjoyed significant growth in North and Latin America, as well as in Asia Pacific,” said Ben Verwaayen, CEO.

“We have strengthened our focus on innovation by realigning our management team and sharpening our strategy further. We have accelerated actions on fixed costs and reduced internal complexity. Free cash flow improved by more than €300m in the first half of the year compared to the year-ago period and throughout the company we are actively driving better working capital management for the remainder of the year.

“We are reaffirming our full-year outlook to grow faster than our addressable market with an adjusted operating margin above 5pc of our 2011 sales.”

Sales also improved 10.4pc year-over-year.

In Q2, the main Networks division led growth, increasing sales 7.4pc to €2.475bn. IP revenues grew almost 28pc to €406m, supported by IP/MPLS routers, and optics sales were up 3.7pc to €645m, on submarine, WDM and microwave growth.

The Wireless unit grew by 5.7pc to €1.08bn in sales, driven by growth in the CDMA business in the Americas, while the Wireline unit was down 2.5pc to €357m due to negative currency effects and weaker legacy products.

At the Applications division, sales fell 0.6pc to €486m, as growth in network apps was offset by a weaker enterprise market.

In Services, Alcatel-Lucent saw a 1.4pc drop in revenue to €871m, but on a constant currency basis, grew sales 2.9pc from a year earlier.

Photo: Ben Verwaayen, CEO, Alcatel-Lucent