A decrease in demand from operators in Europe and North America have weakend telecom equipment maker Alcatel-Lucent’s first-quarter profitability, sinking revenue 12.3pc to €3.2bn.
Alcatel-Lucent’s first-quarter revenue marked a decline of 14.8pc year-over-year at constant currency.
The company’s adjusted gross profit amounted to €971m or 30.3pc of revenues, and adjusted operating loss totalled €221m, a decrease of 6.9pc of revenues.
Reported net profit amounted to €398m or €0.14 per share, and operating cash flow reached €168m.
Alcatel-Lucent also revealed free cash flow of €163m in Q1 2012, marking an increase of more than €100m compared to the year-ago period and €100m of fixed costs savings.
“Today’s results reflect a slow start to the year while demonstrating good control on both cash and costs and a strong momentum in our next-generation products portfolio,” said Ben Verwaayen, CEO of Alcatel-Lucent.
“But gross margin is not at the level we would have liked. Since the last quarter of 2011, we have been negatively impacted by lower volume and by an unfavourable revenue mix, particularly in Services”.
“As 2012 continues to unfold, we will maintain strict financial discipline and we will leverage a number of significant next-generation network roll-outs around the globe, in particular in North America and China, as well as those expanding our position in countries such as Japan and in Latin America. This activity will be strengthened further by our innovation pipeline and major product introductions.”
Verwaayen added that market uncertainties remain high in Europe and the transition from CDMA to LTE is accelerating in North America.
“We leave our 2012 full-year guidance unchanged, and we expect to have better visibility on our profitability at the end of the current quarter,” Verwaayen said.