Alcatel-Lucent posted a profit for Q4 2009 as revenues improved over the preceding quarter, however sales were down across the board compared to a year earlier. Fourth quarter revenue decreased 19.9% year-over-year and increased 7.6% sequentially to Euro 3.967 billion. Fourth quarter adjusted operating income amounted to Euro 271 million or 6.8% of revenue. Adjusted gross margin came in at 36.7% of revenue for the quarter, compared to 33.3% in the year ago quarter and 33.4% in the third quarter 2009.
The company predicts the telecommunications equipment and related services market should recover in 2010, given a more stable global economic climate.
“Revenue came in at the lower end of the indicated range for the year due to the fact that our fourth quarter was not as strong as expected. However, I am encouraged by the strong sequential growth in our orders and by the accelerated traction we are seeing in next generation technologies, as evidenced by our selection by AT&T as a key supplier for LTE,” stated Ben Verwaayen, CEO, Alcatel-Lucent.
“A more stable economic environment and the explosive growth of mobile internet will drive market growth in 2010 and beyond.”
Some highlights of the quarterly report:
- The carrier segment saw a double-digit decline in revenue, driven by 2G wireless access, TDM switching, terrestrial optics and broadband access. The segment did see slight growth in Submarine, good growth in IP and double-digit growth in W-CDMA.
- Revenues for the IP division were Euro 317 million, a decrease of 5.9% from the year ago quarter at constant currency, due to the accelerated rate of decline in ATM.
- Revenues from IP/MPLS service routers grew at a high-single digit rate this quarter, driven by a strong performance in North America and EMEA.
- IP penetration in wireless improved, with sustained expansion in the backhaul market. The company’s LTE Evolved Packet Core (EPC) is seeing strong traction, with 11 trials across all regions.
- Revenues for the Optics division were Euro 763 million, a decline of 19.5% from the year ago quarter at constant currency. All segments of the terrestrial market declined this quarter although the D-WDM segment continued to recover with strong sequential growth and limited year over year decline.
- Submarine networks saw only slight growth this quarter, compared to double-digit growth in prior quarters, albeit from a demanding year ago comparison.
- Revenues for the Wireless Networks division were Euro 799 million, a decline of 33.7% from the year ago quarter at constant currency. GSM was again sharply impacted by slower mobile subscriber growth and a reduction in capital expenditures in all of the markets where Alcatel-Lucent has a meaningful presence. CDMA declined both year-over-year and sequentially due to market weakness in North America and the slow-down in the pace of deployment of this technology in China.
- W-CDMA enjoyed double-digit growth on a year over year basis but declined sequentially off an exceptionally high third quarter which had seen the certification of the company’s converged RNC at a large customer.
- Enterprise revenue declined at a more moderate rate this quarter which is due to the recovery of Industrial Components.
- Applications software revenue grew at a mid single-digit rate and finally Services revenue grew slightly.
- For the fourth quarter 2009, revenues for the Services segment were Euro 1,030million, a decrease of 0.5% compared to Euro 1,035 million in the year-ago quarter and an increase of 18.5% compared to Euro 869 million in the third quarter 2009.
- From a geographic standpoint and at constant currency, revenue declined at a double-digit rate in Europe (-15%), Asia Pacific (-26%) and in the rest of the world (-24%) and declined at a high single-digit rate in North America (-9%).
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