Alcatel-Lucent first quarter revenue down 12.3% to 3.2 billion euro

Telecom Lead Europe: Alcatel-Lucent’s first quarter
revenue decreased 12.3 percent year-over-year to 3.2 billion euro.

The significant decrease in income was primarily due to
double digit decline in networks business.

Asia Pacific was more resilient than Europe, where
uncertainties still prevailed. North America witnessed a double digit decline,
whilst Central and Latin America saw a double digit growth rate.

Net profit was 398 million euro. This includes 659
million euro from discontinued activities, mainly related to Genesys disposal.

Today’s results reflect a slow start to the year while
demonstrating good control on both cash and costs and a strong momentum in our
next generation products portfolio. But gross margin is not at the level we
would have liked. Since the last quarter of 2011, we have been negatively
impacted by lower volume and by an unfavorable revenue mix, particularly in
Services,” said Ben Verwaayen, CEO of Alcatel-Lucent.

In 2012, Alcatel-Lucent will leverage next generation
network roll-outs around the globe, in particular in North America and China,
as well as those expanding our position in countries such as Japan and in Latin
America. This activity will be strengthened further by its innovation pipeline
and major product introductions.

Market uncertainties remain high in Europe and the
transition from CDMA to LTE is accelerating in North America.

Networks saw a double digit year-over-year decline this
quarter. This reflects a continuous strength in IP business, growing at a
double digit rate, more than offset by the double digit decline in Optics and
Wireless resulting from a high comparison base and an overall low level of
spending from service providers.

Wireline business posted some resilience with a low
double-digit decline driven by good performance in PON. Software, Services
& Solutions segment was declining at a low single digit rate compared to
the year ago period, with Services business at a slower pace than Network
Applications. Enterprise segment witnessed a high single digit decline.

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