Alcatel-Lucent ends year in profit for first time

Despite worsening sales figures, especially in the wireless sector, network equipment vendor Alcatel-Lucent (NYSE: ALU) reported its first yearly profit since Alcatel acquired Lucent technologies in 2006.

Quarterly earnings reports for the vendor have been generally improving throughout the last two years, and company officials continued late last week to credit thorough cost-cutting for the improvement.

Alcatel-Lucent reported a 2011 profit of about $1.46 billion, a rosy picture compared to its 2010 loss of about $400 million. However, amid ongoing economic troubles in Europe, the vendor also reported slowing sales, including a 13 percent drop in sales for the final quarter of 2011 that pushed the company to a 2 percent slide in sales for all of 2011, or about $20 billion for the year.

Though the European issues were primarily to blame for the sales dip, Alcatel-Lucent also noted that North American wireless operators had slowed spending on new gear late last year.

The vendor plans to continue fighting for better bottom line figures by pursuing even more cost cuts throughout this year. Also, like other vendors have done recently, it plans to increase revenue by leveraging its rich Bell Labs patent portfolio to a much greater extent by working with a company called RPX Corporation that buys and licenses patents for other firms.

The decision by Alcatel-Lucent to milk its roughly 30,000 patents to a greater extent is an interesting one. Several other telecom vendors have made similar moves in recent years, often driven by their own restructuring--as in the case of Motorola (NYSE: MMI)--or by bankruptcy, as in the case of Nortel Networks. Alcatel-Lucent has been restructuring in one way or another over the last five years, and though it has just nudged above the profit line it is looking for new revenue sources that can help it stay there.

For more:
- see the earnings release
- read this Washington Post story

Special Report: Wireline in the fourth quarter 2011

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