Alcatel-Lucent posts 6.8 percent decrease in Q3 2011 revenue at EUR 3.79 billion

Alcatel-Lucent has registered a 6.8 percent decrease in Q3
2011 revenue at EUR 3.79 billion compared with EUR 4.07 billion in Q3 2010.

 

Substantial decrease in revenues in network and software and
solutions business contributed to the decline in revenue. The company could not
improve its revenue in regions like Asia Pacific, North America and Europe.

 

Alcatel-Lucent  posted a profit of EUR
194 million in Q3 2011 against EUR 25 million in Q3 2010.

 

Q3 2011 revenue in North America decreased 0.3 percent to
EUR 1.47 billion. Asia Pacific contributed EUR 703 million revenue in Q3 2011,
registering an 18.4 percent degrowth. Revenue in Europe was EUR 1.08 billion in
Q3 2011 compared with EUR 1.22 billion, down 11.6 percent.

 

While network business registered revenue of EUR 2.28
billion in Q3 2011, down 7.1 percent, decrease in software and solutions
business revenue was 4.7 percent at EUR 1.1 billion. Enterprise business
brought in revenue of EUR 319 million in Q3 2011 from EUR 293 million in Q3
2010.

 

In the last two years, we have gained the confidence of our
customers with our High Leverage Network and Application Enablement strategy;
the transition from voice to video is taking place around the world and our
portfolio is directly addressing that transformation, as evidenced by our
marketshare gains in IP and Optics; finally, our innovations like lightRadio
are creating strong momentum in the market. On a geographical basis, we have
strong positions in North and Latin America and we are expanding our strong
footprint in China and Asia. In Europe, the market remains hesitant and focuses
on 3G renovation where we are not playing to the extent we do in other parts of
the globe,” said Ben Verwaayen, CEO, Alcatel-Lucent.

“We are reducing our costs and increasing our
profitability. However, we are not at a level we are satisfied with. And given
economic uncertainties, we will take more radical actions to accelerate our
transformation and reduce quickly our costs structure, especially in Europe.
This will generate additional savings in 2012 of EUR 200 million in
fixed costs addressing mainly our SG&A spending and EUR 300 million in
variable costs addressing mainly project and delivery efficiency,” Verwaayen
added.

 

Key areas of strength were IP, the fastest growing division,
followed by wireless, driven by CDMA and LTE.

Within wireline, PON technologies maintained a strong
progression, more than offset by a decline of our IPDSLAM and legacy products.

In Optics, both terrestrial and submarine declined at a high
single digit rate. Software, services & solutions decreased at a low single
digit rate. Within that segment, the slight growth in services was driven by
network & system integration and managed services, offset by a decline in
network applications.

Enterprise witnessed a strong quarter, driven by Genesys and
Data networking. Traction remains strong in North America, with a year-over-year
increase of 10 percent, and in the Rest of World, especially in Central and
Latin America with sustained double digit growth rate. Asia Pacific as well as
Europe witnessed a double digit rate declines.

NETWORKS

For the third quarter 2011, revenues for the networks
segment were Euro 2,285 million, a decrease of 7.1 percent compared to Euro
2,459 million in the year-ago quarter.

Revenues for the IP division were Euro 376 million, a 2.7
percent increase from the year-ago quarter. Its IP/MPLS service router business
continued to drive growth within the division. 

The Americas region remained a key source of growth for the
division. During the third quarter, Korea’s KT selected our 7750 Service
Router to deliver residential broadband services. 

Elsewhere, its mobile backhaul solution was selected by Zain
Saudi Arabia; Wireless City Planning, a Japanese mobile operator led by
SOFTBANK, as part of their 4G network; and C Spire, formerly Cellular South,
announced that we are participating in their network expansion project,
providing IP-based backhaul.

Its Converged Backbone Transformation Solution, which
integrates 100G Ethernet IP and 100G Optical technologies, continued to show
success with the launch of P&TLuxembourg’s 100G (gigabit per second) IP
connection between Frankfurt and Luxembourg.

Revenues for the Optics division were EUR 582 million, a
decrease of 10.6 percent from the year-ago. Both its submarine and terrestrial
optics businesses contributed to the overall decline in revenues in the third quarter
2011.  In its terrestrial business, the company did see double digit
growth in Wireless Transmission (microwave), across all regions, and in WDM in
the Americas. 

Alcatel-Lucent’s single-carrier 100G optical coherent
technology continued to show strong traction in the market with wins at Maxis
in Kuala Lumpur, T-Mobile Czech Republic, and Rostelecom in Russia. 
Taiwan’s Chunghwa Telecom selected Alcatel-Lucent’s 1850 Transport Service
Switch to upgrade their transport network using our Packet Transport Network
solution.

In the submarine business, Alcatel-Lucent expanded its joint
submarine cable maintenance program with TE Subcom to boost the companies’
ability to maintain and repair undersea cables in the northern Pacific region.

Revenues for the Wireless division were EUR 1,032 million,
a decrease of 3.4 percent from the year-ago quarter. Growth continued in the
Americas, led by CDMA EV-DO and LTE businesses, both contributing to strong
double-digit growth in the region.  

In 4G LTE, Alcatel-Lucent has been selected by Telefonica to
launch 4G pre-commercial pilot networks in Madrid and Barcelona; and were
awarded a contract with the city of Charlotte, North Carolina, to build a 700
MHz LTE network for its public safety personnel.  

During the quarter, Alcatel-Lucent demonstrated, with China
Mobile, the first video conversation using LightRadio and the “LTE
Connected Car” in Shanghai, connecting the United States and China,
utilizing China Mobile’s 4G TD-LTE trial network. 

It will jointly develop a mobile broadband network with
Etisalat that will leverage our LightRadio product family. Alcatel-Lucent
was also chosen by China Telecom to expand and upgrade their 3G CDMA network
and by China Unicom to expand their GSM/W-CDMA network in over ten provinces.

Revenues in the Wireline division declined 22.2 percent from
their year-ago level, to EUR 308 million. The decline in Wireline was driven
by weakness in our IPDSLAM business, particularly in EMEA and the Americas. Its
fiber access portfolio continued to show strength, growing in excess of 40
percent, mainly driven by the APAC and Americas regions.  

SOFTWARE, SERVICES AND SOLUTIONS

For the third quarter 2011, revenues for the S3 segment were EUR 1,100  million, a decrease of 4.7 percent compared to EUR 1,154
million in the year-ago quarter.

ENTERPRISE

Revenues in our Enterprise business increased 8.9 percent
compared to the year-ago quarter, at EUR 319 million in the third quarter
2011.

By Telecomlead.com Team
[email protected]