Alcatel-Lucent narrows Q1 losses

Dylan Bushell-Embling
12 May 2014

Alacatel-Lucent significantly narrowed its losses for the first quarter, as the company made progress with its transformation plan.

The company reported a loss of €73 million for the March quarter, compared to a €353 million loss for the same period a year earlier.

Revenue stayed largely flat at €2.96 billion, but excluding the company's in-recovery managed services business, revenue grew 4% year-on-year. The vendor's gross margin also improved to 32.3% from 28.2% a year earlier.

Core networking revenues improved 7%, thanks to gains in the IP Routing and IP Transport segments.

While Alcatel-Lucent's losses narrowed during the quarter, the company was back in the red after reporting a net profit of €134 million for Q4.

In an interview withBloomberg, CFO Jean Raby blamed the loss on non-recurring expenses such as pension and restructuring costs associated with the company's three-year cost-cutting plan.

To help tackle the company's pension obligations, Alcatel-Lucent revealed plans to next year extend a one-time offer to around 45,000 former US employees on a monthly pension to convert these payments into a single lump sum.

The vendor also revealed that pending the necessary closing conditions, the company expects to complete the sale of an 85% stake in its enterprise unit to China Huaxin in the third quarter.

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