Alcatel-Lucent reported a net loss of EUR 885 million for the second quarter, after a EUR 552 million writedown. The impairment charge follows a review of assets as part of the company's 'Shift Plan', announced by new CEO Michel Combes in June. He said the planned cost reductions and debt refinancing under the plan were on track to meet the company's full-year targets.
The net result in Q2 also included EUR 194 million in restructuring charges. Excluding the one-time items, the company posted an adjusted operating profit of EUR 46 million or 1.3 percent of sales. Its gross margin improved to 31.9 percent from 31.8 percent in the year-ago quarter and 29.4 percent in the first quarter 2013.
Revenues were up 1.9 percent year-on-year to EUR 3.612 billion, supported by growth of 20.5 percent to EUR 624 million in the IP division. Alcatel said demand was strong for edge routers and carrier ethernet switches, with a return to growth in the EMEA region. Fixed networks revenue was also up 3.3 percent to EUR 468 million, led by copper products, the Platforms division grew by 23.0 percent to EUR 262 million, and Services revenue rose 22.3 percent to EUR 285 million.
Revenues from the optics division were down 7.0 percent to EUR 422 million on weaker demand for legacy products, despite strong growth in WDM. The Wireless unit also posted a 1.1 percent decline to sales of EUR 1.010 billion, as growth in LTE and RFS was offset by a weaker 2G/3G market.
The company's cash flow was still a negative EUR 248 million, due to restructuring costs and changes in working capital. Combes said "cash remains a challenge" and the company will continue to look for opportunities to reschedule its debt to later years. Net debt swelled to EUR 794 million at the end of June, from EUR 358 million in March, due to higher working capital on an increase in inventories, restructuring charges and contributions to pensions and capex. The debt refinancing in recent months has reduced the amount owed before 2016 by in total EUR 450 million.
