Alcatel-Lucent returns to profit, helped by data growth

Operators buy more equipment as they try to cope with growing data volumes

Telecommunications equipment vendor Alcatel-Lucent returned to profitability and grew its revenue in the third quarter, the company said on Thursday.

Alcatel-Lucent's net profit during the third quarter, which ended on Sept. 30, came in at €25 million (US$35.3 million), compared to a loss of €182 million during the same period last year. Revenue increased to €4.07 billion, up 10.5 percent year-over-year and up 6.8 percent compared to the second quarter, helped in part by favorable exchange rates.

The Networks, Applications and Services segments all saw revenue grow. The Networks segment was boosted by a growing demand for faster IP routers, as operators try to cope with growing traffic from, for example, smartphones and the upgrade of mobile networks to LTE (Long-Term Evolution).

Alcatel-Lucent also saw an increased demand for wireless networks. Growth was particularly strong in North America -- again reflecting operators spending more to handle data traffic growth -- and in Asia-Pacific to take care of a growing numbers of subscribers.

Spending on legacy TDM (Time-division multiplexing) technology continues to decline. However, the decline was offset by an increase in spending on broadband access technologies, including DSL, GPON (Gigabit Passive Optical Network) and home networking, according to Alcatel-Lucent.

Improving sales and the numbers that come with that are a sign that the company is making good progress as it transforms itself, Alcatel-Lucent said in a statement.

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