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Alcatel-Lucent's Revenue Drops, but Operating Loss Shrinks

Alcatel-Lucent's second-quarter revenue fell 2.4 percent year on year, dragged down by slow sales in fixed-line network equipment and terrestrial optical networks, but the company reduced costs, cutting its operating loss by two-thirds compared to a year earlier.

For the full year, the market for telecommunications equipment and related services will grow, by up to 5 percent, Alcatel-Lucent forecast, although it said nothing about its own revenue growth prospects. Excluding restructuring costs and other exceptional items, the company expects to increase its full-year operating margin to between 1 percent and 5 percent, compared to 0.7 percent in the second quarter, it said.

Revenue for the second quarter totalled €3.81 billion (US$4.65 billion as of June 30, the last day of the period reported), down 2.4 percent from €3.91 billion a year earlier. Operating losses narrowed to €45 million from €130 million, which the company attributed to its ongoing cost-cutting program.

Alcatel-Lucent reported a net loss of €184 million for the second quarter, an improvement on the loss of €515 million in the preceding quarter, but worse than the €14 million net profit reported a year earlier.

Revenue from Alcatel-Lucent's network equipment business fell 3.4 percent to €2.3 billion. Within that, wireless equipment revenue rose 5 percent to €1.02 billion, but optical equipment revenue dropped 13.6 percent to €622 million and fixed-line network equipment fell 13.7 percent to €366 million.

Services revenue remained stable at €883 million, while applications revenue rose 5.8 percent to €489 million.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

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