Alcatel has not posted a net profit since the fiscal year 2000, and this didn’t change for the fourth quarter, after it posted a net loss of 524m euros ($661m).

All three of Alcatel’s main businesses (fixed, mobile and private communications), were profitable on an operating basis during the fourth quarter. Revenues were down at 3.76bn euros ($4.75bn) from 4.37bn euros ($5.52bn) in the fourth quarter of 2002.

The fourth quarter losses came almost entirely from a restructuring charge of 524m euros ($661m), as the company enters the final phase of its restructuring plans. Alcatel, like fellow competitors Lucent Technologies Inc and Cisco Systems Inc, suffered greatly during the past three years as spending within the telecoms industry dried up.

Alcatel undertook dramatic steps to insure its survival by severely cutting its cost base, including job cuts and selling off non-core assets. This included the disposal of its battery business last October, and the disposal of its optical component business in May 2003.

Although these cost-cutting efforts are bearing fruit, the company is determined to complete its final stage of restructuring. There is still potential for improving our operations to the extent of several points of operating profitability, said chief executive Serge Tchuruk. We have therefore decided to go ahead with the final phase of our restructuring.

This could include the elimination of 10% of Alcatel’s remaining 60,000 strong workforce by the end of 2004, lowering its headcount to roughly 54,0000. The company shed 17,000 jobs last year.

Europe’s largest telecom equipment firm also looks set to offload its optical fiber and cable business. During a press briefing Tchuruk said the company is in ongoing talks regarding a partnership for the loss-making business, and that an agreement could be reached soon. Earlier in the week, optical cable company Nexans confirmed it had made a bid for Alcatel’s loss-making fibre-optic business.

Even if the market remains uncertain, in view of the book to bill ratio exceeding one for the two previous quarters, we expect Alcatel should resume growth in 2004, at a constant exchange rate, said Tchuruk.

During 2003 the vendor noted increasing sales for its DSL equipment. It shipped 15.1 million lines in 2003, double the number in 2002, with 5.1 million lines shipped in the fourth quarter alone. The vendor also noted growth in VOIP and other IP service systems.

For the year ending December 31, Alcatel reported a net loss of 1.94bn euros ($2.45bn), down from 4.745bn euros ($5.98bn) in 2002. Sales fell 21.9% to 12.513bn euros ($15.78bn) from 16.014bn euros ($20.20bn) in 2002. The year-end net loss included 1.314bn euros ($1.65bn) of restructuring charges and 578bn euros ($729m) of goodwill amortization charges.

This article is based on material originally published by ComputerWire