Alca-Lu makes surprise return to profit, eyes LTE opportunity

Financial analysts greeted Alcatel-Lucent's return to profit with unreserved glee--perhaps not surprising given that the last time this happened was in 2006. However, while posting a net income of €14 million for Q2/09, this performance (which market watchers don't expect to occur again in the near-term) benefited from gains made on asset sales of its satellite business and a 20 per cent stake in defence contractor Thales.

However, the company's CEO, Ben Verwaayen, made a pointed reference (as reported by Unstrung) to LTE as a technology capable of fuelling the company's recovery. "A lot is happening in LTE around the world, and not all of it is announced. We are extremely well positioned"--which analysts interpreted as meaning the fast-pace of LTE deployments planned for the US.

Regardless of this upbeat assessment, the French industry minister Christian Estrosi referred last week to the merger of Alcatel and Lucent as a ‘mistake', and warned the company not to threaten French jobs by offshoring R&D activities or closing further French manufacturing facilities. Earlier this month Alca-Lu said it would cut a further 850 jobs in France as part of an overall plan to save €750 million this year, which will involve 16,500 job losses worldwide.

For more on this story:
Rethink Wireless
and Unstrung

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