Alcatel reported Q2 revenue of EUR 3,384 million, up 7.6% year-over-year. Operating profit was EUR 263 million, a 7.8% operating margin
and net income (group share) was EUR 180 million, representing earnings per share or EUR 0.13.
Some highlights:
- During Q2, Alcatel shipped a record 6.7 million DSL lines
- Q2 gross margin was 33.6%, down from 35.6% a year earlier.
- The IP data business once again recorded significant growth, with new contract wins in the U.S., Denmark, Spain, Venezuela, Malaysia and Thailand. In addition to the strong momentum in IP service routing, the MSWAN activity continued to reflect sustained demand for ATM-based DSL aggregation and for 3G RAN (Radio Access Network) aggregation.
- Revenues grew significantly in the NGN/IMS activity, more than doubling in the first half of the year compared to 2005, with good traction at incumbent operators in Europe and Asia. The business now has more than 90 customers.
- A major win in the Enterprise fixed mobile convergence was awarded this quarter with a tier-1 operator in the UK.
- The traditional TDM voice activity continued to decline as expected during the quarter, however, some of this decrease was offset by maintenance/services revenue, which now accounts for a significant portion of the business.
| Segment Breakdown | Second Qtr | Second Qtr | First Qtr |
| In EUR million | 2006 | 2005 | 2006 |
 | | | |
| Revenues | | | |
| Fixed Communications | 1,363 | 1,224 | 1,273 |
| Mobile Communications | 1,007 | 958 | 908 |
| Private Communications | 1,034 | 981 | 905 |
| Other & Eliminations | (20) | (18) | (19) |
| Total | 3,384 | 3,145 | 3,067 |
| Income from Operations | | | |
| Fixed Communications | 133 | 120 | 110 |
| Mobile Communications | 80 | 115 | 57 |
| Private Communications | 51 | 59 | 48 |
| Other & Eliminations | (1) | (31) | (17) |
| Total | 263 | 263 | 198 |
“While preparing for the merger with Lucent Technologies and the Thales transaction, Alcatel achieved good revenue growth in the second quarter, above market rate. Our strong performance in the wireline segment confirmed Alcatel’s leading position in the network transformation to an all-IP infrastructure to support triple play services. We are particularly pleased with the resulting 4-fold year over year revenue increase in IP routing and aggregation as well as our strong position in the DSL and fiber access markets.”http://www.alcatel.com
