Alcatel Lucent goes black

Once you go red you sometimes go back, baby

Alcatel Lucent returned to profit in the second quarter on the back of cost-cutting and some market share gains in IP and optics.

Sales climbed a little more than 2 per cent to €3.9bn and operating profits were €108m compared to losses of €184m a year earlier.

CEO Ben Verwaayen, installed three years ago to revive the fortunes of the ailing vendor, said results for the year were "on track". The company is likely to offload its enterprise unit if it can find a buyer.

He said it had "realigned management"; last week Stephen Carter took over from EMEA boss from Adolfo Hernandez, who is heading up a new biz unit, Software, Services & Solutions, while other execs were handed duel roles or asked to leave.

"We have accelerated actions on fixed costs and reduced internal complexity," said Verwaayen.

IP sales jumped 35 per cent and optics edged up 6 per cent with latest next-gen kit "delivering market share gains" as customers spent on additional capacity and all-IP network upgrades, the CEO claimed.

The French-American outfit said adoption of 3G and 4G tech underpinned regeneration of the wireless division and in wireline, IPDSLAM and PON counterbalanced declines in legacy products.

The Applications unit reported a mid single-digit increase on the back of next-gen networks software and stabilising Enterprise apps, while Services revenues grew by single digits due to network and system integration and managed solutions.

Operating cash-flow was negative to the tune of €18m and net debt stood at €376m. ®