Alcatel-Lucent turns first ever profit

Michael Carroll
13 Feb 2012

Alcatel-Lucent recorded its first ever profit in 2011, despite a 2% fall in revenues year-on-year.

The infrastructure vendor overturned a loss of €334 million in 2010 with a profit of €1 billion ($1.32 billion) in 2011. A strong final quarter lifted the annual results, with profit surging €528 million year-on-year to €868 million in 4Q11. However, the firm suffered falls in revenue, with its 4Q figure down 12.1% year-on-year, and the full year number 2.1% lower than 2010.

Software and services was by far the most profitable business area for the firm during 4Q11, with operating income up 73.5% year-on-year at €170 million. While the networks unit was the next most-profitable, its income of €82 million is down 64.2% on 4Q10. The firm’s enterprise division generated operating income of €45 million, up 21.6% on 4Q10.

Chief Ben Verwaayen notes the results come amid challenging business conditions, and pledged to continue cost-reduction schemes through 2012. The target is to cut €200 million from the firm’s fixed line business costs, and a further €300 million in variable costs.

“Although visibility remains limited, our aim for 2012 is to achieve an adjusted operating margin higher than the level reached in 2011, and reach a strong positive net cash position at the end of 2012,” Verwaayen comments.

The firm cut its free cash deficit from €818 million in 2010 to €458 million in 2011, however positive growth in 4Q figures hints that the firm is moving in the right direction to hit Verwaayen’s 2012 goals.

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