Alcatel-Lucent's revenue takes a hit in Q1

Fixed IP networks were Alcatel-Lucent's saving grace as wireless networks faltered

Telecommunication equipment maker Alcatel-Lucent reported an operating loss for the first quarter, as revenue fell 12.3 percent year-on-year. Just like its competitors, the company puts some of the blame on the dire economic situation in Europe.

On Thursday, the company reported sales of €3.2 billion (US$4.2 billion), and a net profit of €398 million, compared to a net loss of €10 million a year earlier.

However, the net profit was mostly due to a net capital gain from the sale of its customer-service software and contact-center business Genesys.

Highlighting its struggles, the company reported an operating loss of €289 million, compared to a loss of €64 million during the same period last year.

During the first quarter revenue in Europe dropped by 22 percent year-on-year. Revenue dropped in North America and Asia as well, but not nearly as much.

Alcatel-Lucent wasn't the only telecommunication equipment maker that was hurt by a wobbly European economy during the first three months of 2012. Ericsson's revenue dropped by 4 percent, thanks in part to more cautious operator spending in Northern and Central Europe and slower investments in Russia, it said.

The part of Alacatel-Lucent that fared the best was the IP group, whose revenue grew by 23.5 percent year-on-year thanks to operators investing in areas such as mobile backhaul and 100 Gigabit Ethernet.

The black sheep in the family was the Wireless group, whose revenue decreased by 29.5 percent. Growing operator investments in LTE and 3G weren't able to offset weak GSM sales in China and a decline in CDMA revenue, according to Alcatel-Lucent.

The results reflect a slow start to the year, according to Alcatel-Lucent. Going forward the company expects it will get a boost from network roll-outs in North America and China, but at the same time "market uncertainties remain high in Europe," it said.

Send news tips and comments to mikael_ricknas@idg.com

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Mikael Ricknäs

IDG News Service
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