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Alcatel-Lucent Posts Larger Loss, Blames Component Shortages

Telecommunications equipment vendor Alcatel-Lucent saw losses grow and revenue drop during the first three months of 2010. Positive signs in some markets were cancelled out by a component shortage.

Alcatel-Lucent reported a first-quarter loss of €515 million (US$661 million), more than the €402 million it lost during the same period in 2009. First-quarter revenue totalled €3.2 billion, down 9.8 percent year-on-year.

Sales could have been higher if component shortages had not prevented Alcatel-Lucent from satisfying a growing demand for its wireless access and optical networking equipment, the company said. Last month, Ericsson blamed similar shortages for its first-quarter performance.

Revenue at Alcatel-Lucent's networks segment was hit the hardest, dropping by 13.1 percent compared to year-earlier quarter. Still, growing traffic from smartphones helped increase the need for new 3G network equipment, especially in North America, but demand for GSM networks dropped. LTE (Long-Term Evolution) is still mainly in trials at operators, and can't help pick up the slack.

Alcatel-Lucent's applications and services segments did somewhat better, and recorded revenue drops of 6.3 percent and 3.1 percent, respectively. In the applications segment revenues were impacted by European companies' continued unwillingness to invest in voice telephony, but sales of data networks grew.

For 2010, Alcatel-Lucent continues to expect growth of up to 5 percent in the telecommunications sector.

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