Alcatel-Lucent (NASDAQ:ALU) reported a strong fourth-quarter profit and gave investors cheer with a forecast for growth, profitability and improvements in its operating margin in 2011, possibly indicating the long-struggling equipment vendor's turnaround is kicking into a higher gear.
The Franco-American vendor posted a net profit of $462 million in the quarter, up from $62.5 million in the year-ago quarter. The upbeat results boosted Alcatel-Lucent's shares to their highest levels in 18 months, according to Bloomberg. "We had the best profits this quarter since the merger, and it's a clear indication that we are on our way to becoming a normal company going into 2011," CEO Ben Verwaayen told reporters, according to Reuters.
Alcatel-Lucent's total revenue came in at $6.6 billion, up 22.6 percent from the fourth quarter of 2009. The company said its networks business saw a strong year-over-year increase in revenue, with all divisions growing. Total networks sales were $4.01 billion, up 31.7 percent from $3.04 billion in the year-ago period. The company said revenue in its wireless division was up 44.5 percent from the year-ago quarter, with 56 percent growth in its W-CDMA business, 32 percent growth in CDMA and 14 percent in GSM. Alca-Lu also said it recorded its first significant LTE revenues in the quarter. The vendor is one of the primary equipment suppliers for Verizon Wireless' (NYSE:VZ) LTE network, which launched in December.
Looking ahead to 2011, Verwaayen said the company expects to grow faster than the overall infrastructure market and aims to achieve a significant increase in profitability. Alcatel-Lucent said it is planning for an adjusted operating margin above 5 percent of 2011 sales.
Importantly, Alcatel-Lucent appears to have resolved problems with component supplies, which hampered results earlier in 2010. The component situation has now "improved dramatically, and we don't see any issue in terms of being able to meet demand," CFO Paul Tufano said on a conference call with reporters, according to Bloomberg.
- see this release
- see this Bloomberg article
- see this Reuters article
- see this Dow Jones Newswires article (sub. req.)
- see this FierceWireless Q4 earnings page
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