Alcatel-Lucent Q1 revenue at Euro 3.23 bn, up 0.6 percent

Alcatel-Lucent's (ALU) registered revenues of Euro 3.23 billion in the first quarter, an increase of 0.6 percent year-over-year.

At constant currency exchange rates and perimeter, the revenues increased 1.8 percent year-over-year and decreased -19.9 percent sequentially.

Networks and platforms grew 6 percent year-over-year with high single digit growth in IP and good traction in wireless, fixed networks, platforms and services, all partially offset by a double-digit decline in optics. Focused businesses declined at a double-digit rate compared to the year ago quarter, with Enterprise at a mid-single digit rate and submarine at a faster pace. Finally, the slowdown in managed services continued, reflecting our restructuring efforts.

From a geographic standpoint, also adjusted for constant currency and compared to the year ago period, North America reached historical highs as a percentage of total revenues (48 percent), resulting from strong growth in the region. While Japan showed good traction and China stabilized, the Asia Pacific region declined at a low single digit rate. Cautious spending persisted in Europe, which declined at a 10 percent rate. Rest of world declined at 10 percent, where growth in Brazil was offset by weakness in the rest of Central and Latin America and Middle East and Africa.

Michel Combes, CEO Alcatel-Lucent said "Alcatel-Lucent's first quarter results reflect both encouraging trends in the market place and good progress with The performance program, for which discipline on execution remains the priority in 2013. Free cash-flow remains a challenge. Strong focus will be placed on working capital management to reverse some of the negative impact incurred this quarter. We are actively reviewing the group's businesses and operating model to design the conditions for value creation in the future. I am looking forward to sharing the outcome in early Summer."

Operating expenses decreased -5.5 percent year-over-year on a reported basis and adjusted for constant currency decreased -5 percent year-over-year, reflecting results of our actions to streamline our cost structure, strongly focusing on SG&A expenses.

First quarter reported net loss of Euro 353 million or Euro 0.16 per share. This includes restructuring charges of Euro 122 million and Euro 152 million of financial loss. The reported net loss also includes Purchase Price Adjustments (PPA entries in relation to the Lucent business combination) of Euro 23 million pre-tax or Euro 14 million after tax.

For the first quarter 2013, revenues for Networks & Platforms were Euro 2,713 million, an increase of 4.2 percent compared to Euro 2,604 million in the year-ago quarter. Revenues for the IP division were Euro 493 million, increasing 6.3 percent from the year ago quarter and 9.3 percent at constant currency. Revenues grew in both the Americas and APAC regions with strong progress in our order book.

Revenues for the Optics division were Euro 342 million, a decrease of 15.6 percent from the year-ago quarter. We continued to witness declines in our legacy equipment, which now represents 30 percent of our optics product revenues, partially offset by growth in WDM in both our Europe and APAC regions.

Revenues for the wireless division were Euro 966 million, an increase of 4.9 percent from the year-ago quarter. Within wireless, we witnessed growth in LTE and RFS, which includes cable, antenna and tower systems, that was partially offset by an overall decline in 2G/3G technologies.

 

Our LTE business reached its highest level of revenues ever, as network deployments in the US continue to drive growth. Elsewhere around the world, we signed a number of new LTE contracts including Etisalat in Sri Lanka and unveiled lightRadio Metro Radio with China Mobile, which will
help accelerate deployment of 4G TD-LTE technology across China.

ALU revenues for the fixed networks division were Euro 405 million, an increase of 8.6 percent from the year-ago quarter, reflecting strong growth in both copper and fiber products. We expanded our fiber footprint in the quarter, adding 13 new customers, as growth continued to be driven by APAC, and more specifically China.

Revenues for the platforms division were Euro 226 million, an increase of 1.8 percent from the year-ago quarter. In the quarter, we saw growth from a number of activities within the Platforms division, including the Motive Customer Experience Solutions business (CxS), Advanced Communications (IMS), Subscriber Data Management and Payment & Charging businesses.

ALU revenues for the services division were Euro 293 million, an increase of 33.2 percent from the year-ago quarter.