Alcatel-Lucent says loss slashed, share drops

6th May 2011, Comments 0 comments

Telecommunications equipment group Alcatel-Lucent reported a sharp reduction of losses on Friday, stood by its targets for the year and praised its Japanese suppliers.

The group, formed by the absorption of US company Lucent, has been through several years of financial problems and restructuring, but it said it had cut the net loss to 10 million euros (14.46 million dollars) in the first quarter from 515 million euros at the same time last year.

And it made an operating profit of 13 million euros.

But the price of its shares slumped by 6.39 percent to 4.01 euros. Dealers said that traders had taken profits on the share.

The group emphasised the outcome for adjusted operating profit, saying this amounted to 0.3 percent of sales which was better than a loss of 68 million euros as expected on average by analysts polled by Dow Jones Newswires.

In the same period of last year, this figure showed a loss of 195 million euros.

"The improvement in adjusted operating profit from the first quarter of 2010 is largely the result of action to reduce costs and to improve the way work is carried out," the company said.

The gross adjusted margin was 1.3 billion euros or 36.2 percent of sales which totalled 3.7 billion euros.

All parts of the business advanced, but sales from equipment for the mobile telephone sector rose by 36.5 percent mainly owing to equipment for fourth-generation 4G LTE telephones in the Americas.

Chief executive Ben Verwaayen expressed satisfaction with the results, saying the group had begun the year as it had ended last year by "consolidating our growth, our profitability and our global situation."

He praised what he termed the "remarkable" performance of Japanese suppliers of components which had limited the effect of earthquake damage on activities within Alcatel-Lucent.

© 2011 AFP

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