Alcatel-Lucent posts big Q4 earnings jump

Thu, 02/10/2011 - 7:00am
Greg Keller, AP Business Writer

PARIS (AP) – Alcatel-Lucent said Thursday its net profit surged in the fourth quarter compared with a year earlier, thanks to rising demand for broadband networks across the globe.

The French-U.S. telecommunications equipment maker reported net profit of euro340 million ($464 million) for the October-December quarter, up from only euro46 million a year earlier.

Sales rose 23 percent to euro4.9 billion, boosted by demand from phone companies that are upgrading their networks to cope with growing demand for smartphones such as the iPhone and BlackBerry.

The company said adjusted operating margin, its preferred measure for profitability, will rise to above 5 percent this year, compared with 1.8 percent in 2010, as years of restructuring following the 2006 merger of Alcatel of France and Lucent of the U.S. begins to pay off.

"As we enter 2011, I am more confident than ever in our ability to transform into a normal company," CEO Ben Verwaayen said.

Growth last year was driven by North America, where the company makes around one-third of its sales. Sales surged by 45 percent in the fourth quarter alone in North America.

Alcatel-Lucent, which has its North American headquarters in Murray Hill, N.J., has struggled for years to return to profit, with total losses since the company's trans-Atlantic tie-up now topping euro9 billion.

Further restructuring in the first half of last year offset a return to profit in the second half, leaving Alcatel-Lucent's full-year net loss at euro334 million. Verwaayen has pledged to return the company to annual profit this year.

Alcatel-Lucent supplies telecommunication carriers such as AT&T, Verizon and France Telecom. It competes with European rivals such as LM Ericsson AB of Sweden and Nokia Siemens Networks of Finland.


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