Alcatel-Lucent reported continued losses in the third quarter amid a slowdown in carrier spending on network equipment. The company's revenues came in at EUR 3.599 billion, down 2.8 percent from a year earlier and up 1.5 percent from Q2. At constant currency rates and operations, revenues were flat sequentially and decreased 9.7 percent year-over-year.
Europe led the drop in sales, falling 15.4 percent to EUR 893 million, while North America edged up 2.0 percent to EUR 1.459 billion. Sales at the Networks division fell 4.3 percent to EUR 2.187 billion, led by a 18.9 percent decline in wireless to EUR 837 million. Software & Services grew revenues 5.0 percent to EUR 1.155 billion and generated an operating profit of EUR 55 million. The Enterprise division posted a loss of EUR 7 million, on revenues down 13.8 percent to EUR 188 million.
The gross margin dropped to 27.9 percent from 35.3 a year ago, and the adjusted operating loss ended at EUR 125 million. Alcatel-Lucent said operating costs were down 2.6 percent from a year ago, and it had already implemented cost savings of over EUR 450 million since the start of this year. It still reported a net loss of EUR 146 million or 6 cents a share for the quarter, versus a profit of EUR 194 million or 8 cents a share a year earlier.
Cost cuts, reviewing managed service contracts and reducing headcount will continue through the end of 2013. The company ended the quarter with USD 4.7 billion in cash and said it expects to erase its small net debt position of EUR 84 million by year-end. CEO Ben Verwaayen said Alcatel will continue to invest in R&D in its core products throughout the transformation process, and the company is also looking at ways to strengthen its balance sheet.
