Alcatel-Lucent keeps full-year outlook despite Q2 loss

Alcatel Lucent (ALU) posted a second-quarter loss but reaffirmed its full-year outlook with nominal growth of between 0% and 5%, despite continued component shortages. Like its competitor Ericsson, (ERIC) Alcatel Lucent revenues were buoyed by wireless development in North America. A-Lu and Ericsson are primary network providers for both Verizon Wireless and AT&T Mobility as they build out LTE networks.
Q2 revenue increased more than 17% sequentially to $4.9 billion, but was down more than 2% from the same period one year ago, but the network firm reported a loss of $240 million. “Networks saw a year-over-year single-digit decline in revenue, driven by fixed access, switching and optics. This has been partially offset by continued strong growth in IP and W-CDMA,” according to the company.
I am pleased with the continuing progress in our transformation journey, illustrated in the second quarter both by the top line and profitability. Revenues for the quarter reflect the on-going and expected overall improvement in market conditions and the good traction of our product portfolio. This is notably highlighted by the good performance in IP and wireless and, from a geographic standpoint, by strong growth in North America,” said CEO Ben Verwaayen.
The company’s wireless division revenues saw a 5% increase from a year ago, driven by its W-CDMA business. “Our W-CDMA business was the key driver of that increase with another quarter of near 50% year-over-year growth driven primarily by the North American market. A very strong sequential increase in our CDMA business reflected spending to accommodate data traffic growth on 3G CDMA (EV-DO) networks, and the year-over-year decline in our GSM business eased to a single digit rate.” Its applications business saw a 5.8% increase in revenue, while its services business saw a 1.1% increase in revenue. However, declining revenues in its wireline business contributed to the quarterly loss.