Alcatel-Lucent has reported revenues of €3.5bn for the second quarter of 2012, a decrease of 7.1% when compared to the same quarter in 2011.
Double digit declines in both wireless resulting from a higher comparison base and moderate or delayed spending from service providers, and optics have offset the double digit growth rate in IP business.
Revenues from the networks segment, optics division, wireless division, the S3 segment, and enterprise business declined in the second quarter when compared to revenues with the same quarter a year ago, whereas the IP division rose by 16.5% to €473m compared with previous year’s same quarter.
Revenues from North America witnessed a double digit decline, due to a high comparison base, whereas Central and Latin America recorded its seventh consecutive quarter of double digit growth.
Resilience in Eastern Europe driven by Russia somehow tempered the Western Europe double digit decline, while a double digit decline was seen in Asia Pacific, primarily driven by China.
The company’s adjusted gross profit was €1,125m for the quarter, while its adjusted operating loss was €31m.
Alcatel-Lucent said the overall lower volumes and an unfavorable geographical and product mix had contributed to the year-over-year decline in gross margin.
The company has posted net loss of €254m or €0.11 per diluted share, including the negative after tax impact from purchase price allocation entries of €33m.
It expects adjusted operating margin in the second half of 2012 to be better than first half.
CEO Alcatel-Lucent Ben Verwaayen said the second quarter results demonstrate the company’s strong positions in many attractive market segments, including IP, next-generation optics and broadband access, all of which are key investment areas that support its high leverage network strategy.
"However, despite having demonstrated our ability to deliver operational profitability, it is clear from the deteriorating macro environment and the competitive pricing environment in certain regions challenging profitability that we must embark on a more aggressive transformation," Verwaayen added.
"We are therefore launching today The Performance Program to accelerate our transformation and reduce costs by Euro 1.25 billion by the end of next year in order to keep ahead of market realities.
"We have increased cash and decreased debt since Q4 2008 with a net benefit of Euro 625 million. And we target a strong positive net cash position at the end of the year 2012."