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10/30/2009
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Alcatel Lucent Sales, Profits Slide

A 2Q profit of $19.7 million, however, may help the networking company break even for the year.

Alcatel Lucent reported a growing drop in sales and profits in its third quarter report Friday, but the firm's chief executive insisted the French-American networking company is still on track to deliver a breakeven year.

Alcatel Lucent reported a loss of $270 million for the quarter versus a loss of $59 million in the same quarter last year. Revenue dropped 9% to $5.47 billion. The company reported a profit of $19.7 million in the second quarter, however, and that gain may help produce a breakeven year.

"Against what remains a challenging market environment," said CEO Ben Verwaayen in a statement, "we reiterate our view that our addressable market should be down between 8% and 12% at constant currency and that we will achieve an adjusted operating income around breakeven this year."

The company has been struggling to meld its two cultures since their 2006 merger and the global recession has made the job harder. After its previous top managers left a few months ago, Alcatel Lucent has struggled to pare older technologies and reposition the firm in emerging technologies.

"Our company continues its transformation journey," said Verwaayen. "We are winning in areas of differentiation such as IP transformation, next-generation broadband and wireless, application enablement, and services." As examples of important new projects, he pointed to a deal with Qwest Communications to merge IP and optics into a combined solution. Verwaayen also cited Alcatel Lucent's 16 LTE trials including new ones with France Telecom-Orange, Telefonica and Etisalat.

While the global picture in the third quarter was grim, declining 32% in most regions of the world, Alcatel Lucent posted a surprising, if slim, gain in North America where revenues were up 1%.


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