AlcaLu doubles loss as carrier, North Am sales shrink

Alcatel-Lucent more than doubled its first quarter loss as North American and carrier sales slumped.

It posted a net loss of EUR402 million ($540 million), out from EUR181 million a year ago as revenue declined 6.9% to EUR3.598 billion.
The Paris-headquartered vendor has accumulated EUR8billion in losses since it was created in a merger in 2006.
“While expected, given seasonality and tough market conditions, we are not pleased with the operating loss,” said CEO Ben Verwaayen.
Geographically the biggest hit came in North America, where sales declined 28%, while Asia-Pac sales were off 8% and Europe 1.5%.
Sales to telecom carriers, the biggest customer segment, fell 14% to EUR2.2 billion, and enterprise sales dropped 17.5%. The declines reflected “capital constraints in fixed and mobile access, switching and enterprise voice telephony, only partly offset by the growth in IP, W-CDMA and submarine optics,” the company said.
Operating income was also in the red at EUR254 million, as gross margin shrank just under five points to 31.5%.
Against this, the company pointed to growth areas in services, which grew 20.6% to EUR797 million, and application software, up 13.3% to EUR255 million.
Alcatel-Lucent confirmed its forecast of an adjusted operating profit break-even in 2009. It expects the global telecom equipment market to contract 8%-12% in 2009.