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Alca-Lu posts loss, share price rises

Not as horrible as it might have been

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The combination of American growth, continuing staff cuts and an ongoing restructure last week delivered a narrowing quarterly loss for Alcatel-Lucent.

On sales of €3.67 billion ($US5 billion), the vendor turned in a not-catastrophic net loss of €200 million ($US275 million), weighed down by €335 million ($US461 million) in restructuring and financial charges.

What got the share-market bulls beaming was that third-time-lucky CEO Michael Combes seems to have made some progress in his strategy to turn around the vendor, which has accumulated losses of $US10 billion over the last seven years. From an operating loss of €126 million ($US173 million) for the same quarter last year, Alcatel-Lucent now put in an operating profit (prior to the afore-mentioned charges) of €116 million ($US160 million).

Its Core Networking business unit is approaching half of Alca-Lu's total business, reaching €1,496 ($US2,058) in the quarter, with IP routing rising 7 per cent to €580 million (nearly $US800 million). The company is also pleased to see growth in 100 Gbps backbone products, which now represent 30 per cent of its WDM line card shipments.

Its LTE business is piling on customers in the USA, APAC and EMEA regsgions and rose by 12.6 per cent, but in the intensely competitive access business, the company could only manage 3.7 per cent year-on-year growth.

Combes says Alcatel-Lucent will undertake €1 billion ($US1.4 billion) in asset sales by 2015. His plan for staff cuts of 10,000 worldwide is continuing, and Combes said the company expects to overdeliver on its turnaround strategy. ®

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