Alcatel Lucent reports profit, but lowers 2010 outlook

Alcatel-Lucent may have come one step closer to reaching its break-even goal by posting a net profit in Q4 09, but ongoing competitive pressure from rival vendors drove it to reduce its 2010 forecast.

During the quarter, Alcatel-Lucent reported a net profit of $63.2 million. This is the second time it actually reported a quarterly net profit since Alcatel acquired the former Lucent Technologies in 2006. Company CEO Ben Verwaayen said the company reached near break-even at an adjusted operating income level for 2009.

However promising the net profit increase was, company sales were down 19.9 percent year-over-year and 7.6 percent sequentially to $5.45 billion. One segment hit particularly hard was its carrier segment which saw a double-digit dip in revenue. Alcatel-Lucent's main competitors Ericsson and Nokia Siemens Networks saw similar declines in Q4; Ericsson's sales dropped 13 percent, while NSN sales dropped 16 percent.

As it navigates through its turnaround journey, Alcatel-Lucent lowered its 2010 outlook. The vendor forecasted that it would see zero to five percent overall market growth in 2010.

Despite the near-term challenges, company CEO Ben Verwaayen believes the company's recovery is a work in progress that will eventually pay off. "We are on a three-year path to recovery," he said in an interview with the Wall Street Journal. "By 2011, it should be mission accomplished."

For more:
- see the release here
- Wall Street Journal has this article

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