Alcatel-Lucent reported a disappointing Q3 with overall revenue decreasing 6.8% year-over-year and 2.7% sequentially to Euro 3,797 million. At constant currency exchange rates and perimeter, revenue decreased 0.7% year-over-year and decreased 3.8% sequentially. Reported net income (group share) was Euro 194 million or Euro 0.08 per share.
Some key trends for the period:
- Sales were strong in North America with a year-over-year increase of 10%, and in the Rest of World, especially in Central and Latin America with sustained double digit growth rate. Asia Pacific as well as Europe witnessed a double digit rate declines.
- Networks saw a low single digit decrease this quarter, reflecting mixed trends.
- IP, the fastest growing division, followed by Wireless, driven by CDMA and LTE. Revenues for the IP division were Euro 376 million, a 2.7% increase from the year-ago quarter. Revenues for the Wireless division were Euro 1,032 million, a decrease of 3.4% from the year-ago quarter. At constant currency exchange rates, wireless revenues increased 2.8% year-over-year.
- Within Wireline, PON technologies maintained a strong progression, more than offset by a decline of IPDSLAM and legacy products.
- In Optics, both terrestrial and submarine declined at a high single digit rate.
- Software, Services & Solutions decreased at a low single digit rate. Within that segment, the slight growth in Services was driven by Network & System Integration and Managed Services, offset by a decline in Network Applications.
- Enterprise witnessed a strong quarter, driven by Genesys and Data networking.
“We are reducing our costs and increasing our profitability. However, we are not at a level we are satisfied with. And given economic uncertainties, we will take more radical actions to accelerate our transformation and reduce quickly our costs structure, especially in Europe. This will generate additional savings in 2012 of € 200 million in fixed costs addressing mainly our SG&A spending and € 300 million in variable costs addressing mainly project and delivery efficiency. For the remaining part of 2011, given these market uncertainties, and selective spending from our customers, especially in Europe, we now expect weaker revenues there than initially planned in the fourth quarter of 2011,” stated Ben Verwaayen, Alcatel-Lucent’s CEO.
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