Telecom equipment maker Alcatel-Lucent (NASDAQ:ALU) moved closer to achieving its goal of profitability and long-term growth. The company posted first quarter revenues of $5.43 billion, an increase of 15.2 percent year over year. In addition, the company had an adjusted gross profit of $1.96 billion, or 36.2 percent of revenues.
CEO Ben Verwaayen noted that Alca-Lu's North American business accelerated in the first quarter, up 40 percent year over year. In addition, the company said its Networks division saw an increase in revenue of more than 20 percent, driven in part by the growth in wireless, particularly W-CDMA and EV-DO and 4G technologies.
Chris Antlitz, an analyst with Technology Business Research, noted that Alcatel-Lucent's major contract wins with AT&T (NYSE:T), Verizon Wireless (NYSE:VZ) and Sprint Nextel (NYSE:S) led to a 40 percent increase in the company's North American revenue, and that North America now comprises nearly 42 percent of Alcatel-Lucent's total revenue, surpassing Asia and the Middle East. Antlitz estimated that Alcatel Lucent will continue to see strong growth in North America for the next four years.
Alcatel-Lucent's adjusted operating income was $18.8 million, or 0.3 percent of revenues. The company's cash flow was $245.1 million and its net debt was $153.8 million, down from $525 million in net debt in the fourth quarter.
The company said it doubled its EV-DO business compared with a year ago, and also saw growth in LTE. It completed a field trial of LTE with Ntelos and was selected by that operator to expand Ntelos' existing 2G/3G network. Alcatel-Lucent also said it demonstrated IMS-based Voice over LTE during the first quarter.
Verwaayen noted the company did face some difficulties with its supply chain following the recent earthquake and nuclear crisis in Japan. However, he said it will only have a limited impact on the company.
Alcatel-Lucent also confirmed it still plans to have an adjusted operating margin of 5 percent for 2011, and growth likely will be flat to up 5 percent.
For more:
- see this WSJ article (sub. req.)
- see this release
Special Report: FierceWireless Q1 earnings page
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