Alcatel-Lucent makes loss on static first-quarter revenue

The company will present a plan to turn it around in early summer, it said

Alcatel-Lucent's first-quarter revenue inched up 0.6 percent year on year, but it reported a net loss after making a profit a year earlier.

Sales for the quarter ended March 31 totalled €3.2 billion, up 0.6 percent, but the net loss of €353 million (US$459.6 million) compared poorly with the €259 million profit during the same period last year.

CEO Michel Combes, who joined Alcatel-Lucent from Vodafone in February, said he plans to publish the results of his review of the company's business activities by "early Summer." The company hopes to make between €1 billion and €1.5 billion over the next 18 to 24 months by selling off some of those activities, it said earlier this year.

Alcatel-Lucent attributed the net loss to restructuring charges of €122 million and €152 million of financial loss, among other factors.

The company's operating income improved overall, as did the operating income for all major business units. Only what the company calls 'focused businesses', which include enterprise networks and submarine cables, did worse, together making an operating loss of €9 million for the quarter, down from an operating profit of €14 million a year earlier.

While revenue from the focused businesses, and from managed services, also dropped, things were brighter in the networks and platforms sector, which at €2.7 billion accounted for the bulk of the company's revenue, up from €2.6 billion a year earlier.

Within that sector, services, wireless and fixed networks performed best. The latter was helped by fiber and copper network sales. Last week Alcatel-Lucent announced it had shipped one million VDSL2 vectoring lines to 11 different service providers, including Belgacom and Telekom Austria. Vectoring is a technology used to boost the bandwidth possible over telephony networks.

The wireless division was the biggest part of Alcatel-Lucent with sales totalling €966 million, a 4.9 percent increase year-on-year. The LTE business saw record revenues, as network deployments in the U.S. continued to drive growth.

The black sheep of the networking family during the first quarter was the optics division. Its revenue dropped by 15.6 percent.

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Mikael Ricknäs

IDG News Service
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