Alcatel-Lucent dips into loss as sales decline and margins get thinner
- 02 November, 2012 14:22
- Comments
Alcatel-Lucent reported a third-quarter loss and declining gross margins, as its cost-cutting program failed to keep up with declining sales of its network equipment and related services.
The company reported a net loss of ¬146 million (US$188 million as of the last day of the period reported), compared to a year-earlier net profit of ¬194 million. Revenue declined 2.8 percent to ¬3.60 billion, from ¬3.70 billion a year earlier, while gross margin slipped to 27.9 percent from 35.3 percent a year earlier.
Revenue rose by 2 percent year on year to ¬1.46 billion in North America, but fell 15.4 percent to ¬893 million in Europe.
Sales of carrier networking equipment declined 4.3 percent, buoyed by strong sales of Internet Protocol networking equipment and by currency fluctuations. At constant exchange rates the decline would have been 11.8 percent. IP equipment sales rose 30.3 percent, to ¬490 million. Broadband local loop sales, including DSL and GPON (gigabit passive optical network) equipment, rose 26.3 percent to ¬389 million. However, wireless equipment sales dived 18.9 percent, to ¬837 million, and optical networking equipment sales fell 17.5 percent, to ¬480 million.
Alcatel-Lucent's software, services and solutions division did somewhat better, with services contributing all of the growth. Overall revenue from the division grew 5 percent, to ¬1.16 billion, of which services contributed ¬1.06 billion, up 6.2 percent. Telefonica was one of the biggest customers here: the company is in the process of streamlining and automating supervision of all its networks through a single platform.
Enterprise networking equipment sales of ¬218 million were 13.8 percent down on a year earlier, or 16.5 percent excluding the effects of currency fluctuations. The company made an operating loss of 3.2 percent of revenue on these products. Sales of voice networking products continue to decline, but Alcatel-Lucent is seeing some success in sales of data networking equipment to small and medium-size businesses and to data centers, where the company's 10Gbps products are proving popular, it said.
The company provided little guidance on future performance, beyond saying it expects operating margin to be better in the second half of this year than in the first half.
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.
Recommended
Join the Computerworld Australia group on Linkedin. The group is open to IT Directors, IT Managers, Infrastructure Managers, Network Managers, Security Managers, Communications Managers.
- Bookmark this page
- Share this article
- Got more on this story? Email Computerworld
- Follow Computerworld on twitter
- ESG Whitepaper: Integrated Computing Platform Survey
- How the Cloud Changes the Game for Line of Business Managers in Midsize Companies
- Vodafone Ireland Implements World-Class Service Excellence with HP BSM
- St. Vincent’s Hospital - Finding Visibility, Flexibility and Control with MaaS360
- Clearing the Clouds for Midmarket Businesses
-
Good riddance Google Reader: Feedly throws switch on alternate RSS service
-
Mobile app data protection not our responsibility, say Australians
-
NBN Co should prepare for Coalition government: NBN committee
-
Google adds more retailers for Chromebook
-
Mobile app data protection not our responsibility, say Australians
