Alcatel-Lucent’s profits improve in Q3

4 Nov 2011

Alcatel-Lucent CEO Ben Verwaayen

Profits for telecommunications equipment maker Alcatel-Lucent improved in the third quarter, with the company reporting a net income of €194m, up from €25m in the same period a year ago after cost reductions.

Revenues totalled €3,797m, which is a decrease of 0.7pc year-over-year at constant currency and down 6.8pc year-over-year on a reported basis

Adjusted gross profit amounted to €1,380m, or 36.3pc of revenues, and adjusted operating income came in at €173m or 4.6pc of revenues.

The company had operating cash flow of €35m.

“We are well under way in our transformation,” said Alcatel-Lucent CEO Ben Verwaayen. “And while progress is not always linear, the overall picture is clear: in the last two years, we have gained the confidence of our customers with our High Leverage Network and Application Enablement strategy; the transition from voice to video is taking place around the world and our portfolio is directly addressing that transformation, as evidenced by our market share gains in IP and Optics; finally, our innovations like lightRadio are creating strong momentum in the market.”

Alcatel-Lucent has strong positions in North and Latin America and it is expanding its footprint in China and Asia, Verwaayen added.

“In Europe, the market remains hesitant and focuses on 3G renovation where we are not playing to the extent we do in other parts of the globe,” he said.

“We are reducing our costs and increasing our profitability. However, we are not at a level we are satisfied with. And given economic uncertainties, we will take more radical actions to accelerate our transformation and reduce quickly our costs structure, especially in Europe. This will generate additional savings in 2012 of €200m in fixed costs addressing mainly our SG&A spending and €300m in variable costs addressing mainly project and delivery efficiency.”