Going by the quarterly reports of major vendors, wireless equipment business is whirring back to favor. Putting panic behind them, Lucent Technologies Inc. and Motorola Inc. recorded solid growth, while Nokia Corp., Qualcomm Inc. and Siemens AG reaffirmed sunny outlooks.
Lucent unveiled its second consecutive quarterly profit in its first-quarter results with a net income of $338 million, or 7 cents per diluted share. This builds on the supplier’s fourth-quarter result of a net income of $99 million, or 2 cents per share. In the year-ago period, Lucent suffered a net loss of $264 million, or 11 cents per share.
“We continued to generate positive momentum in the first quarter of fiscal 2004,” said Lucent Chairman and Chief Executive Officer Patricia Russo. “We remain focused on expanding our revenue sources by pursuing opportunities in services, the government sector and outside the United States, as well as in areas like metro optical, broadband access, voice over IP and mobile high-speed data.”
The company’s revenue jumped to $2.26 billion, an 11-percent increase sequentially and 9 percent from a year ago. In its fiscal fourth-quarter 2003, Lucent revenues totaled $2.03 billion. The company recorded $2.08 billion in revenues in the same period a year ago (2002). Gross margin for the most recent quarter was 41 percent of revenues compared with 43 percent in the fourth quarter of fiscal 2003. In its mobile business, the company enjoyed a 51-percent rise sequentially in the most recent quarter to $960 million, representing a 32-percent increase from the same period last year.
Lucent has been racking up contracts in CDMA and UMTS in the United States and Asia. It also is involved in professional services with companies such as Qwest, Verizon, Codetel, Portugal Telecom and Bell Canada. The company, however, does not expect to significantly raise the tempo in the coming quarters.
“We still expect annual revenues to remain essentially flat or to increase slightly year over year,” said Chief Financial Officer Frank D’Amelio.
German vendor Siemens AG said it surpassed market expectations with a group net profit of $992.3 million, or $1 per share, in contrast to a year ago when it earned $661.7 million, or 75 cents per share. “I am particularly pleased that on a currency-adjusted basis, we are again showing growth,” said Siemens Chief Executive Officer Heinrich v. Pierer.
“At a macroeconomic level, however, I am concerned that further strengthening of the euro against the dollar could have potential adverse effects on the competitiveness of the European industry,” he said.
In its mobile business, Siemens recorded a net profit of $156 million on what it described as a “sharp earnings improvement at the Mobile Networks division, strong handset sales and continuing profitability in its cordless products business.”
Sales rose 6 percent to $3.6 billion, and orders were $3.8 billion, a 23-percent leap from a year earlier. The infrastructure division earned $33 million on sales of $1.4 billion compared with a loss of $25 million on sales of $1.3 billion a year ago.
Motorola Inc. posted a net income of $489 million, or 20 cents per share, for the fourth quarter of 2003, trumping Wall Street expectations.
This figure contrasts with a year ago when the company had a net income of $174 million.
Excluding one-time items, the company earned 17 cents against 13 cents in the year-ago period.
The company had total sales of $8.02 billion, a 4.2-percent jump from $7.7 billion a year ago.
In the network division, sales leaped 11 percent to $1.4 billion compared with the year-ago period and 30 percent from the third quarter. The division also enjoyed a 67-percent surge in orders to $1.8 billion and had operating earnings of $138 million compared with a $22 million loss in the same period last year. Excluding items, it earned $125 million in contrast to $3 million last year. Since it acquired Winphoria’s soft switch technology, Motorola has been garnering infrastructure contracts around the world, including Asia, Europe and the Middle East. It hit a big deal with several Chinese companies with $1.1 billion in contracts earlier this month.
The chip unit had a 2-percent rise in sales to $1.4 billion from a year ago and was up 12 percent from the previous quarter. The division had a profit this time; it was the only major loss-making division last quarter. The chip division had an operating profit of $25 million vs. a profit of $18 million a year ago.
Qualcomm Inc. said it beat market expectations in its first-quarter results with a net profit of $352 million, up 21 percent from the last quarter. This represented 43 cents per share, 23-percent higher sequentially.
Revenues totaled $1.2 billion for the quarter, a 37-percent jump from the previous quarter and 13-percent higher year on year.
“We now anticipate the full 2004 fiscal year to be stronger than we had earlier anticipated due to increased worldwide demand for CDMA phones and devices with increased functionality such as color screens, cameras and multimedia capabilities,” said Irwin Mark Jacobs, chairman and chief executive officer of the company.
The company increased it guidance for fiscal 2004, expecting an approximate 6- to 10-percent year-on-year growth in total revenue and total earnings per share to be in the range of $1.41 and $1.46.
Nokia’s network unit suffered a net sales decline of 18 percent year on year to $2.2 billion in the fourth quarter. Pro-forma operating profit in the division stood at $262 million compared with $24 million in the fourth quarter of 2002. “Nokia Networks positive Q4 pro-forma result comes from stronger-than-expected year-end operator investments combined with a favorable product mix and the success of the decisive restructuring measures we took in early 2003,” Ollila said. “It also reflects the improved profitability of 3G W-CDMA as we have successfully addressed temporary quality issues experienced in the first part of 2003.”
Nokia’s infrastructure earnings bring a measure of optimism to a division speculated to be on the verge of being sold.
