AlcaLu profit falls short

AlcaLu profit falls short

Robert Clark  |   November 05, 2010
Alcatel-Lucent’s stock fell 11% Thursday after its Q3 result missed expectations, despite announcing a small profit and higher sales.
It announced earnings of €25 million ($35.5m), compared with a €182 million loss in the same period last year. 
The French vendor revealed revenue of €4.07 billion, up 10.5% year-over-year and 6.8% sequentially. To underscore what it expects to be a strong quarter in sales, it unveiled new US and Chinese contracts worth $5.7 billion.
But the operating profit of €61 million, on the back of a 33.8% gross margin – down from the previous quarter and a year ago - was below analysts’ expectations, reported.
The company maintained its full-year outlook. CEO Ben Verwaayen said he expected “a significant sequential increase” in top line revenue in the fourth quarter.
Revenue growth came mainly from the demand for IP and mobile networks, as well as for managed services.
“From a geographic standpoint, on top of the established strong dynamic in North America, we experienced good growth in India, China and Russia fuelled by our recent contracts wins and better market conditions,” the CEO said.
“We improved our overall profitability sequentially and year over year even though our product and geographic mix was less favorable than in the second quarter of 2010.”
Alcatel-Lucent shares on the NYSE fell 8.96% and then 2.46% in after-hours trading to $3.17.
Separately, the vendor announced a four-year 3.5G/4G contract with Verizon Wireless worth $4 billion. The deal will cover CDMA and LTE radio solutions, IP and backhaul and professional services. 
It also revealed frame agreements worth €1.18 billion ($1.7b) with all three Chinese operators. The China Mobile deal is worth €530 million, the China Telecom contract €343 million and the China Unicom €305 million.
The agreements will be signed in Paris today during the visit of Chinese President Hu Jintao.

MORE ARTICLES ON: Alcatel-LucentChina MobileChina TelecomChina UnicomEarnings

Robert Clark

Video from Telecom Channel

Fiber: Key to reducing backhaul bottleneck
Surge in mobile data requires fiber for more cost-effective, higher- capacity backhaul, says Transmode CEO. read more


John C. Tanner
Telstra leverages the cloud to tap its workforce for new ideas
Tony Poulos
Biggest rally for seven years
Angel Dobardziev/Ovum
The beginning of an M&A end-game?
Nick Dillon/Ovum
May undermine the dominance of platform-specific development
Tonia Graham/TM Forum
Standardized measurements for operators, vendors and consultants
Robert Clark
Operators can be powerful advocates for light-touch regulation and surveillance


Windows Phone 7: Will Microsoft finally redeem itself in the smartphone OS race?


Olga Kharif
Criminals follow the money
Ivan Pepelnjak
Can MPLS-TP meet carrier needs?

Frontpage Content by Category's most popular news stories, blogs, analysis and features in the first six months of 2010


Staff writer
Program targets Iraqi refugees in Syria
Staff writer
Bob Toohey is former SVP of global customer care at Verizon Business