Alcatel-Lucent, which chalked up losses in each of its last nine quarters, has reported its first profitable quarter since the company made its debut in 2006. As news of the company's $19.6 million net profit for the quarter came out, Alcatel-Lucent shares rose more than 9 percent. The company attributed these gains to the sale of satellite business and its stake in French defense contractor Thales SA. Alcatel-Lucent is now examining what other non-core assets it can sell.
But industry watchers argue to hold the celebration as sales decreased during the quarter. And while revenues did increase by 8.5 percent to $5.5 billion over the first quarter, they were down 4.8 percent from 2008. Alcatel-Lucent's adjusted operating loss was $87.2 million compared with an operating profit of $131 million in 2008, while adjusted gross margin was 33.1 percent, a decrease of 34.9 percent from last year.
Similar to its telecom vendor counterparts Ericsson and Nokia Siemens Networks, Alcatel-Lucent continues to struggle with network infrastructure sales. The company's carrier segment reported a loss of $191 million compared with $117 million in 2008. However, the company's professional services division continues to show promise.
Company CEO and Chairman Ben Verwaayen was quoted in a Wall Street Journal article that he was "seeing positive trends' in its sales, gross margin and operating expenses. He added that the company will close to breaking even at the operating level this year, despite expecting the overall telecommunications equipment market to contract between 8 to 12 percent.
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