Alca-Lu 'lifted' by 4Q profit

Positive fourth quarter results mean more to Alcatel-Lucent than just pure profits, chief financial officer Paul Tufano says.
Instead, the figures represent the culmination of a strategy put in place two years ago, and should provide a welcome boost to staff morale, Tufano told Telecoms
Net income soared from €46 million in 4Q09 to €340 million in the recent quarter, as the firm grew revenues nearly 23% to €4.8 billion on the back of higher sales across all of its divisions.
“[It’s] always satisfying to see the progress that’s been made,” Tufano said, adding that the firm expects “2011 to be better.”
Despite the confidence, Tufano stopped short of revealing whether the infrastructure vendor expects to turn its first annual profit in the next 12 months.
The firm cut its full year loss from €524 million to €324 million during 2010, and will continue to look for cost savings and margin improvements through 2011, Tufano said.
Growth drivers in the fourth quarter included higher sales of GSM and CDMA equipment, and the firm also benefitted from a rebound in business in China as operators there restarted investment in network rollouts and upgrades following a largely stagnant 2009.
However a rebound in Europe also contributed to the results, with Tufano noting that a 6.7% rise in revenues to €1.5 billion was driven as much by operators in the west of the region as by those in the east – an unusual result given the maturity of the Western Europe market.
“We’re seeing good signs across the world,” the CFO noted.
While the recently announced lightRadio infrastructure is unlikely to have a great impact on earnings in 2011 with only limited shipments predicted, Tufano said the long-term impact would be great, noting that the technology “will be disruptive.”
Moving forward, the firm will get “very aggressive on the cost of delivery,” of all products, the CFO said, adding that it is also working to cut the complexity of its organization to make it “much more streamlined, and simpler.”