Alcatel-Lucent Loss Shrinks on Lower Revenues

Published on: 30th October 2008

Alcatel-Lucent has reported a net loss of ¢â€š¬40 million (US$51.8 million) compared to a loss ¢â€š¬345 million a year earlier, when earnings were hammered by restructuring charges. Revenues declined 6.6% year-over-year and decreased 0.9% sequentially to ¢â€š¬4,065 million (US$5.2 billion).

At constant exchange rate and on a year-over-year basis, Carrier revenues declined 9.4%, Enterprise revenues grew 6.3% and Services revenues grew 16.6%.

Ben Verwaayen, the company's new CEO commented "First, let me state that we are in good shape from a cash standpoint. We achieved a positive cash flow from operating activities this quarter through the reduction of our operating working capital requirements. The funded status of our pensions and other post retirement benefits remains materially positive with a prudent asset allocation. With gross cash on hand and marketable securities of Euro 4.46 billion and less than Euro 1 billion worth of bond debt maturing in the next 12 months, we are adequately funded."

"Second, we met our revenue guidance in a more challenging macroeconomic environment. In addition to the ongoing CDMA decline, we saw a reduction in spending by certain customers in developed markets, especially in fixed access and terrestrial optics. This was partly offset, however, by the strong performance of certain carrier activities, including W-CDMA, NGN and submarine networks. In addition, we continued to grow our Enterprise business at a healthy rate and saw accelerated growth in Services."

He warned though that the company's profitability remains unsatisfactory and the company will set out a series of actions that will be described over the coming months to address this.

In mobile networks, GSM revenue declined this quarter, due to the temporary freeze on networks expansion in China during the Olympics. W-CDMA revenue doubled this quarter, as it continued to benefit from a strong ramp-up in revenues in France, the US and Korea. CDMA revenues declined materially year-over-year but recovered sequentially, as the company began shipments to a Chinese customer.

 

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