Alcatel-Lucent Reports Rising Profit on Falling Revenue

IDG News Service — 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 a!4.15 billion (US$5.37 billion), and a net profit of a!868 million, compared to a net profit of a!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 a!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 a!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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