Alca-Lu bullish after 1Q growth

Alcatel-Lucent is confident of meeting its full year targets of growing faster than the market and generating operating margin of 5%, after slashing its losses by €505 million in the first quarter. 

The firm recorded a net loss of €10 million for the period, on the back of higher sales across all its divisions and a one-time €69 million tax gain due to changes to US pension regulations.
 
Networks remain the firm’s major earner with revenues up 25% year-on-year at €2.4 billion. The applications business registered an 8% hike in sales to €451 million, and the services division a 4.8% rise to €809 million. North America was the largest market by region, with sales growth of 40% offsetting marginal changes to income from Asia Pacific (+1.7%), and Europe (-1.8%).
 
While chief Ben Verwaayen said the results carry a trend of “increasing growth, profit and global strength,” forward from 4Q10, the firm’s results show a heavy sequential dip in earnings from profit of €340 million in the last three months of 2010.
 
Verwaayen noted that quick action to address potential supply chain disruptions should limit their impact, and that the market is maintaining strong momentum due to demand for “more capacity and service delivery capabilities,” across multiple markets. 

The first quarter is shaping up to be good for all infrastructure firms. Rival Nokia Siemens Networks’ also cut its losses during the period, cutting the figure €84 million year-on-year to €142 million.

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