The market has reacted positively to Alcatel-Lucent's first quarter results despite the telecoms equipment maker's results being down across the board.
Shares in the French-American firm reached a six-month high on Friday morning, jumping 4.4 percent to €10.15 in Paris before settling down to €9.97.
Alcatel-Lucent recorded revenues of €3.9 billion for the quarter, compared to €4.4 billion a year ago. The gross profit for the quarter was €1.1 billion, down from €1.8 billion for the same period last year. Net profit for the quarter dropped to €199 million from €306 million a year ago.
<>Operating income showed the biggest fall, with the telecoms equipment firm posting an operating loss of €244 million in the first quarter compared to an operating profit of €246 million a year earlier.
Alcatel-Lucent attributed the bulk of the losses to costs incurred in the firm's $13.4 billion transatlantic merger which was completed last December.
Patricia Russo, chief executive of Alcatel-Lucentm was pleased with the company's performance in light of the costs associated with the merger. "Having completed the largest merger in our industry, we are encouraged by the progress we are making with our overall integration plans," she said.
Russo said the firm is on track to make pre-tax cost savings of at least €600 million in 2007 and that significant savings had been made in the first quarter. "During the first quarter we took costs out of the business in areas such as procurement, information systems and R&D, and have achieved a net headcount reduction of approximately 1,900 positions," she said. "We are on track to achieve our planned pre-tax savings of at least €600 million this year, in line with our target of €1.7 billion pre-tax savings within three years."
In February ENN reported that Alcatel-Lucent intends to shed a total of 12,500 jobs worldwide, including 70 of the 390 staff at its Irish operation in Dublin, as part of its cost cutting plan. The French-American firm had initially stated last year that it would cut 9,000 staff worldwide.
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