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Alcatel-Lucent, S.A. (ALU) 3Q12 Earnings Review

Alcatel-Lucent, S.A. (NYSE:ALU) announced its Q3 earnings results on November 2, which despite posting a bigger loss as compared to last year, beat analyst estimates. The French phone gadgets maker posted a revenue of EUR 3.6 billion, a 2 percent decline year over year while earnings came down at EUR 146 million, or $188 million, equivalent to EUR 0.06 per share. Nonetheless, this performance was better than the loss of about EUR 149.1 million projected by analysts.
Revenue from Networks was reported at nearly EUR 2.2 billion, representing 6.8 percent decline year over year while Software, Services & Solutions was up 4.8 percent. Revenue from the company’s enterprise division declined by 3.7 percent.
Geographically, North America accounted for most the company’s revenue, contributing nearly EUR 1.46 billion while Europe came second with EUR 893. Asia Pacific region posted EUR 680 worth of revenues while the rest of the world managed EUR 567.
The company has started a restructuring program to try and get back to profitability territories, including disposal of fixed assets. Speaking during the conference call, Ben Verwaayen, the CEO of Alcatel-Lucent said, “our third quarter results are reflective of the significant transformation we are undertaking both in terms of scope and timing. In addition, our revenue growth and gross margin were impacted by overall carrier spending dynamics and product mix, especially in wireless”.
The company reported more than EUR 4.7 billion in cash and marketable securities, according to the press release, but posted an overdraft of 84 million in net cash and cash equivalents for the period compared to a positive balance of EUR 236 million posted in Q2. Nonetheless; the CEO expressed that Alcatel-Lucent intends to end the year with positive cash flow.
The company is also engaged in staff layoffs as part of the restructuring process which includes high levels of near term cash expenditure, and this is likely to impact the company’s cash flow in 2013 through 2014.


About Nicholas Maithya

I am a writer focussing on disruptive technology, Fintech, Big Data and Internet of Things, Online Marketing trends, and investments. When I am not writing about these, I am probably in the gym working out, out and about with family, watching the news (basically business/technology) or soccer. That's why I do sometimes cover soccer-related stories.


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