Alcatel-Lucent: IP, optical divisions drove rise in Q1 2011 results

Alcatel-Lucent (NYSE: ALU) gave investors something to smile about as the Franco-American company reported Q1 2011 of $5.23 billion and adjusted operating profit of $13 million.

For Q1 2011, Alcatel-Lucent's revenue increased 13.9 percent year-over-year and decreased 21.6 percent sequentially.

The two major contributors to Alcatel-Lucent's Q1 growth were from its Networks and IP divisions. Networks reported year-over-year increase in revenue with all divisions growing, while IP revenues revenues rose 20 percent.

Alcatel-Lucent's adjusted operating income was $18.8 million, or 0.3 percent of its revenues. The company's cash flow was $245.1 million and its net debt was $153.8 million, down from $525 million in net debt in the fourth quarter.

The company's revenue results met analyst forecasts of $5.35 billion.

Similar to Q4 2010, Alcatel-Lucent saw ongoing gains in its IP, optics and wireline divisions:

  • IP Division: Driven by ongoing sales in its IP/MPLS service router business, Alcatel-Lucent's IP division rose 28.3 percent to $497.8 million. IP/MPLS server router business revenues were up 40 percent from Q1 2010 and nearly doubled in the Americas region. Among the many banner customer wins in Q1 deploying Alcatel-Lucent's IP/MPLS gear were MTN Nigeria, KT and nTelos in the U.S. for wireless backhaul.
  • Optics Division: Optical revenues rose 15.3 percent to $933 million with a second consecutive quarter of 20 percent year-over-year growth in the terrestrial business was joined by an increase in the submarine business. This was the first time the submarine business saw year-over-year growth since the subsea segment turned negative in early 2010. Although Alcatel-Lucent saw growth across its terrestrial business, the WDM segment drove the majority of the growth with a 40 percent increase in revenue.
  • Wireline Division: During Q1 2011, Alcatel-Lucent's wireline division was up 3.7 percent to over $440 million. A key point of growth was seen in its fiber access business with new customer wins including Taiwan's Chunghwa Telecom to deploy Taiwan's first GPON network, and by a regional development consortium to build a fiber-to-the-home network in western Spain.

While Alcatel-Lucent's CEO Ben Verwaayen reported expected supply chain issues due to recent earthquake and nuclear crisis in Japan, he maintained the company's 2011 outlook of adjusted operating margin of five percent, with growth likely will be flat to up five percent

For more:
- see the earnings release
- Reuters has this article
- here's FierceWireless' take

See FierceTelecom's Q1 earnings summary

Related articles:
Alcatel-Lucent recovery continues with rise in Q4 revenue and a solid outlook
Alcatel-Lucent Q3 profit buoyed by IP and wireless growth
Alcatel-Lucent lands major deal with Portugal Telecom for IP infrastructure
Alcatel-Lucent lights up China Telecom's, China Mobile's FTTH networks

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