Alcatel-Lucent losses grow as revenue shrinks

Alcatel-Lucent reported a 6.9 percent drop in first-quarter revenue compared to last year, while losses more than doubled.

Revenue fell to €3.60 billion (US$4.82 billion) for the first quarter, from €3.86 billion a year earlier, while the net loss grew to €402 million, from €181 million in the first quarter last year.

"We are disappointed at having a loss," said CFO Paul Tufano in a webcast presentation to analysts.

Excluding exceptional items related to Alcatel's 2006 acquisition of Lucent Technologies, the increase in the net loss was more dramatic, widening to €358 million from €95 million a year earlier.

The company is relatively optimistic about the future: it expects operating results to break even for the full year, adjusted for exceptional items, despite reporting an adjusted operating loss of €254 million for the first quarter, down from an adjusted operating profit of €36 million in the same quarter last year.

"I think we have a very good shot at being profitable in 2010," said CEO Ben Verwaayen, in the same webcast.

The biggest fall in revenue came in equipment sales to carriers, down 14 percent to €2.22 billion. Within that figure, sales of IP (Internet Protocol) products, including MPLS (multiprotocol label-switching) routers, rose 4.7 percent to €287 million but sales of legacy wireline telecommunications products including DSL access equipment fell 28.4 percent to €394 million.

"We are taking market share in IP," Verwaayen said.

He was also positive about the company's performance in wireless network infrastructure, which accounted for around half of equipment revenue.

As China builds out 3G (third-generation) mobile networks, he said, "We have won market share in all three technologies."

The first orders for the successor to those 3G networks, LTE (Long Term Evolution) are also starting to roll in. In February the company announced that it had won a contract to upgrade part of Verizon's mobile network to LTE (Ericsson will upgrade the rest) and the company is participating in most of the LTE trials around the world, Verwaayen said.

Application software sales rose 13.3 percent to €255 million, boosted by multimedia products for carriers, and services revenue jumped 20.6 percent to €797 million.

Alcatel-Lucent's sales were hardest hit in North America, where they fell 16.9 percent to €1.11 billion. Sales dipped 2.5 percent in Europe, to €1.25 billion, and 2.8 percent in Asia-Pacific, to €649 million.

Sign up for ITworld's Daily newsletter
Follow ITworld on Twitter @IT_world

• Email
• Print
• Share
  • Slashdot
  • Digg
  • Stumble
  • Reddit
  • Newsvine