Alcatel-Lucent (NASDAQ:ALU) reported a net loss in the second quarter but maintained its 2010 outlook. The equipment vendor said it is still dealing with component shortages but now has a better handle on the situation.
For the quarter, Alcatel-Lucent reported a net loss of $240 million, a reversal of the net profit of $18.2 million in its year-ago quarter when it benefited from a one-time sale of its stake in French aerospace electronics company Thales. Alca-Lu's revenue clocked in at $4.96 billion, down 2.4 percent from $5.09 billion in the year-ago period but up 17.4 percent from the first quarter of 2010. The company also posted an adjusted operating profit of $36.4 million in the quarter, compared with a loss of $80.7 million in the second quarter of 2009. This number excludes items like the cost of the merger between Alcatel and Lucent and is often seen by analysts as a key measure of the firm's actual performance.
Alcatel-Lucent said revenue for its wireless division was $1.33 billion, up 5 percent from the year-ago quarter. The company's WCDMA business was the key driver, with a nearly 50 percent increase in growth, driven mainly by the North American market. The company expects the second half of the year to be stronger, backed by increased order demand.
For the year, the company expects growth of between 0 and 5 percent for the telecommunications equipment market. Alca-Lu also said it continues to expect to reach an adjusted operating margin of between 1 and 5 percent.
The company said component shortages are easing, but still persist. Component shortages also crimped rival Ericsson's (NASDAQ:ERIC) sales in the second quarter.
"It's not over yet. The issue is still there, but we have a better way of handling it," Alcatel-Lucent CEO Ben Verwaayen said in a conference call with reporters. "It's an industry-wide, global problem that won't be resolved over the next three months though," he added, according to the Wall Street Journal.
- see this release
- see this WSJ article (sub. req.)
- see this FierceWireless Q2 earnings page
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