Alcatel-Lucent posts operating loss for first quarter of 2012

Revenue down 12.3% year on year as global demand for network infrastructure falls, but the company made a net profit of £324m in Q1 2012 compared with £8.1m loss in the same period a year ago

Alcatel-Lucent posts operating loss for first quarter of 2012

Alcatel-Lucent reported an adjusted operating loss of £180m yesterday (26 April 2012) in its results for the first quarter of 2012. This compares with an operating income of £3.2m in the first quarter of 2011 and £227m in Q4 2011.

The company’s net profit for the quarter was £324m compared with a loss of £8.1m in Q1 2011, but this was 54.1% down on Q4 2011, when the company made a net profit of £707m.
Revenues were down 12.3% year-on-year to £2.6bn and were down 22.7% on Q4 2011 from £3.3bn. Gross margins dropped 5 percentage points to 30.3%

Commenting on the results, Ben Verwaayen, CEO Alcatel-Lucent, said: ‘The 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. 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.’

The Networks part of the business saw an 18.1% fall in revenues to £1.6bn year-on-year. IP grew by 23.5%, but this was offset by 25.2% decline in optics, a 29.5% drop in wireless and an 8.7% fall in wireline sales. The Software, Services and Solutions proved steadier with just a 0.6% decline to £790m, while sales in the Enterprise side fell 8.7% to £145m.

Geographically, North America remains Alcatel-Lucent’s most important market, but sales fell by 11.9% to £1bn. Europe proved an even more difficult market with sales dropping 22% to £699m. Revenue from the Asia-Pacific region declined by 5.5% to £404m, while revenue from the rest of the world grew by 0.4% to £416m.

Verwaayen said: ‘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.’

He added: ‘However, 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.’

Written by Wireless magazine
Wireless magazine

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