Alcatel-Lucent Q4 Results Disappoint

Alcatel-Lucent’s revenue fell for the fourth quarter, and the company plunged into loss. The performance was disappointing, but the long-term prospects of the merger of Alcatel and Lucent Technologies remain positive, the company said.

Fourth-quarter revenue dropped 16 percent year on year on a comparable basis, to 4.42 billion euros (US$5.83 billion as of Dec. 31, the last day of the period reported) from 5.25 billion euros, while revenue for the full year fell to 18.25 billion euros from 18.57 billion. Although the merger was only completed at the end of November, the company provided pro-forma figures as if the merger had taken place on Jan. 1, and restated earlier figures on a comparable basis.

On that basis, the company made a net loss of 618 million euros in the fourth quarter, compared to a net profit of 381 million a year earlier. For the full year, net profit fell to 522 million euros, down from 1.67 billion on a comparable basis the previous year.

The disappointing performance was due to uncertainty among customers and staff about the outcome of the merger, and to a highly competitive market in North America during the fourth quarter, the company said.

Post-merger, the company makes about three-quarters of its revenue from carrier products. Revenue of 1.47 billion euros came from fixed-line telecommunications equipment in the fourth quarter, 1.24 billion from wireless equipment and 510 million from converged products. Enterprise networking equipment accounted for 410 million euros, and services for 740 million. Demand was particularly strong for enterprise IP telephony equipment in Europe, the company said.

As it proceeds with the integration of Alcatel and Lucent, the company expects to realize cost savings of 600 million euros this year, and a total of 1.7 billion in cost savings within three years of the merger. The savings will come from optimization of its supply chain, and the elimination of duplicate resources and products, and about 12,500 jobs.

-Peter Sayer, IDG News Service (Paris Bureau)

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