Losses widen at Alcatel-Lucent

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Losses widen at Alcatel-Lucent

Alex Scroxton
Year-on-year net losses at Alcatel-Lucent widened to €515m (£437.4m) from €402m, after tightening components availability hobbled its ability to keep up with the economic recovery in Q1, the comms vendor revealed on Thursday morning.

First quarter revenues declined 9.8% on the same period last year to €3.24bn - 8.2% at constant currency rates.

In the last quarter of 2009 Alcatel-Lucent posted its first ever net profit after booking a series of one-time gains but the first three months of 2010 saw a return to disappointing form.

CEO Ben Verwaayen, who is struggling to turn around the company whose bacon he was hired to save, said there were signs of a recovery in the telecommunications markets in some geographies, driven by technology such as IP, terrestrial optics and WCDMA/LTE.

"However," he continued. "We were not able to fully satisfy customer demand for our products due to tightening components availability. This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company."

By segment, Networks saw sales slide 13.1% to €1.92bn after the IP, Optics, Wireless and Wireline divisions all posted year-on-year declines. Applications slipped 6.3% to €416m, while Services sales were down 3.1% to €772m, with declines in Networks & System Integration and Network Build & Implementation failing to offset healthy growth in Managed & Outsourcing Solutions.

Alcatel-Lucent reiterated its 2010 outlook, anticipating adjusted operating margins of between 1% and 5%, and nominal growth of between 0% and 5%. It added that its supply chain continued to experience capacity constraints, but that demand for telecoms and related services is recovering steadily.

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