Alcatel-Lucent reports rising profit on falling revenue

The company has signed a patent deal to help increase revenue

Telecommunication equipment maker Alcatel-Lucent reported a profit for the fourth quarter, but revenue fell 12.9 percent year-on-year as the company continues to face a challenging market, it said on Friday.

The company reported sales of €4.15 billion (US$5.37 billion), and a net profit of €868 million, compared to a net profit of €340 million a year earlier.

Revenue was down across Alcatel-Lucent's different divisions; the wireless division fared the worst with a 22.8 percent drop. The only exception was the enterprise division, which grew its revenue 0.3 percent.

The company also reported a full-year net profit for the first time since the merger of Alcatel and Lucent Technologies in 2006. Cost-cutting has played a big role in helping Alcatel-Lucent return to profit, and next year the company plans to cut an additional €500 million in costs.

Like many vendors, Alcatel-Lucent hopes patent licensing will help increase its revenues. On Friday, the company announced a patent syndication deal with patent licensing company RPX, which also counts technology companies Avaya, Ericsson and Nikon among its clients. Alcatel-Lucent will still retain the ownership of its 29,000 patents -- which cover areas such as wireless, semiconductors, optical, cloud computing and network security.

But just because Alcatel-Lucent is making a profit doesn't mean the company is out of the woods. Overall, the fourth quarter last year was a tough one for the telecommunication equipment makers.

In November, Nokia Siemens Networks said it is planning to cut 17,000 jobs worldwide as it aims to cut €1 billion from its annual costs by the end of 2013, while Ericsson's profits dropped by 66 percent year-on-year.

Alcatel-Lucent's goal for 2012 is to achieve a higher operating margin that in 2011.

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