Alcatel-Lucent reported fourth-quarter revenues of EUR 3.967 billion, down 19.9 percent from a year earlier. At constant currency rates, revenues fell 16.8 percent year-on-year and were up 9.1 percent from Q3. Alcatel-Lucent said revenues were not as strong as expected in the quarter, but it was upbeat about sequential growth in orders and demand for new technologies such as LTE. Operating profit, excluding one-time items, came in at EUR 271 million or 6.8 percent of sales, and the company met its full-year target for adjusted operating profit of around breakeven, after posting a small loss of EUR 56 million. Alcatel-Lucent said it exceeded its cost reduction targets, with operating expenses down 12.4 percent year-over-year in Q4, helped by the weaker dollar versus the euro. Overall costs were down around EUR 950 million from a year earlier, helping bring the revenue breakeven level for adjusted operating profit down by around EUR 1.05 billion, the company said. Net profit came in at EUR 46 million or EUR 0.02 per share, helped by a net EUR 201 million in one-time gains, and Alcatel-Lucent generated operating cash flow of EUR 635 million in the quarter.
For 2010, Alcatel-Lucent forecast the telecommunications equipment and related services market to come in flat to 5 percent higher. The company targets its own adjusted operating margin at 1-5 percent in 2010, rising to 5-9 percent in 2011. It previously aimed for a margin of around 5 percent in 2010.
Carrier sales fell 28.3 percent year-on-year to EUR 2.242 billion in Q4 and were up 0.5 percent from Q3. The segment posted an adjusted operating profit of EUR 19 million, down from EUR 148 million a year earlier. The double-digit decline in revenue was driven by lower sales in 2G wireless access, TDM switching, terrestrial optics and broadband access. The segment did see slight growth in submarine, good growth in IP and double-digit growth in W-CDMA, Alcatel-Lucent said.
Revenues for the Applications software segment were up 1.5 percent from a year earlier and up 16.8 percent from the third quarter to EUR 334 million. The segment reported an adjusted operating profit of EUR 65 million, up from EUR 15 million in the year-ago period. At the Enterprise division, revenues of EUR 283 million were down 11 percent year-on-year and up 13.2 percent from Q3. Adjusted operating profit fell to EUR 21 million from EUR 28 million a year ago. The company said Enterprise revenue declined at a more moderate rate this quarter due to the recovery of Industrial Components. Finally Services revenues were down 0.5 percent from a year earlier and up 18.5 percent from Q3 to EUR 1.03 billion, with operating profit rising to EUR 141 million from EUR 80 million a year ago.
