The report said the French firm also predicted that operating profit would hardly change in the third quarter from the 263 million euros ($331 million) posted in the second quarter.
Net profit fell to 180 million euros ($226.6 million) in the second quarter from 196 million euros (248.5 million) a year earlier, even padded by a gain of 12 million euros ($15 million) from the sale of fixed assets, the report said.
Sales rose 7.6% to 3.38 billion euros ($4.25 billion), buoyed by continued strong growth of broadband Internet equipment at the fixed-line unit.
According to the report, margins across the industry are being hit by intense price competition as several players, including low-price Chinese vendors, are moving aggressively to gain market share and build a position in new markets.
Alcatel's operating margin came in at 7.8%, the report said.