Alcatel-Lucent appeared to address investors' concerns that its U.S. operation is too heavily reliant on large operators, with a deal to deploy an LTE overlay network for second-tier operator Pioneer Cellular.
Alcatel-Lucent's CEO said the company remains on track to reach its goal of becoming free cash flow positive by next year. And he said the company will be able to persist against its larger rivals like Ericsson and Huawei.
Alcatel-Lucent capped off the second quarter of 2014 with a narrower loss. Yet sales in the United States fell and investors have grown worried that the company's reliance on large contracts from U.S. carriers could hurt it if network activity drops.
Alcatel-Lucent has launched a $1.4 billion offer in convertible bonds, which will be used to pay off the $1.75 billion on the company's senior secured credit facility in the U.S. as part of its Shift Plan.
The CEOs of Orange and Alcatel-Lucent continue to call for greater consolidation on the French market--a move they say would provide a more level playing field for the market's mobile operators.
Alcatel-Lucent is in talks to sell its cybersecurity unit to Thales as part of what it says is a broader partnership to address network security opportunities.
Alcatel-Lucent sharply cut its losses in the first quarter and its adjusted operating income beat analyst expectations, but sales dipped year-over-year in the United States, its largest market by far.
Alcatel-Lucent continued to show an improvement in its operating performance after the equipment manufacturer reported its group net loss fell by almost 80 per cent to €73 million ($101 million) in the first quarter of 2014, from €353 million a year previously.
Alcatel-Lucent posted its first quarterly net profit in two years in the fourth quarter of 2013, and said its turnaround under the "Shift" plan led by CEO Michel Combes is on target. In the fourth quarter the vendor's North American sales inched up and the company's overall margins widened.
Alcatel-Lucent said it will cut fewer jobs in France than originally planned, indicating that the US-Franco equipment manufacturer and the country's mobile operators have been influenced by pressure from the French government.