Alcatel-Lucent has reported revenues of Euro 3.6bn (£1.3bn) for the third quarter of 2013 – up 1.9% yr-on-yr and up 1.3% on the previous quarter. Sales growth would have been 7% at constant exchange rates.
The company made a reported loss of Euro 200m (£170.3m) compared with a loss of Euro 316m (£269m) a year ago: adjusted results put the loss at Euro 188m (£160m) compared with a loss of Euro 282m (£240m) in Q3 2012. The loss was a distinct improvement on Q2 2013, which saw Alcatel-Lucent rack up losses of £786m.
Gross margin improved by nearly five percentage points from 27.8% a year ago to 32.6%, driven mainly by a stronger contribution from IP Routing, Terrestrial optics and Ultra-Broadband Access solutions. Commercial performance was strong, with new contracts announced in each main region, Europe, the United States and Asia, notably in Fixed and Mobile Access.
As part of its Shift Plan to restructure the group and bring it back to profitability, Alcatel-Lucent achieved Euro 84m (£71.4m) of fixed costs savings in the period, bringing year-to-date total fixed costs savings to Euro 259m (£220.2m), with notably a continuous decrease in selling, general and administrative costs.
However, Alcatel-Lucent's net debt climbed by Euro 210m to Euro 1bn during the quarter, up from Euro 794m as of 30 June 2013. This included restructuring charges of Euro 117m and a financial charge of Europ 218m.
The company reported a positive adjusted operating income of Euro 116m (£98.8m) in the quarter. Over the first nine months of the year, adjusted operating income improved by more than Euro 360m (£306m) compared with last year period.
The geographic split saw North America providing the highest sales in the quarter of Euro 1.6bn (£1.3bn) – up 13.6% yr-on-yr; Europe achieved revenues of Euro 922m (£785m) – up 3.1%; Asia Pacific was down 10.6% yr-on-yr to Euro 608m (£518m); and the rest of the world fell by 15.3% to Euro 480m (£408m).
Divisionally, Core Networking, which includes IP Routing, IP Transport and IP Platforms brought in Euro 1.4bn (£1.1bn) – up 0.9% yr-on-yr, while Access, which includes Wireless Access, Fixed Access, Managed Services and Licensing took Euro 1.9bn (£1.6bn) - an increase of 3.7% yr-on-yr.
Looking ahead, Alcatel-Lucent expects its business in the fourth quarter of the year to be driven by a strong seasonal activity, and to exceed the top end of the Euro 250-300m in fixed costs savings for the full year announced by the Shift Plan.
Commenting on the third quarter results, Michel Combes, CEO of Alcatel-Lucent (pictured), said: “We are seeing the first positive signs of our new operating model in our day-to-day business and are encouraged by the substantial progress in the Shift Plan key metrics. Going forward, we remain fully focused on execution to leverage the momentum we are building.”
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