Alcatel-Lucent sinks back into red with Q110 results

Shares in Alcatel-Lucent took a dive after the telecoms vendor reported its first quarter 2010 financial results, showing that despite a small recovery in the previous quarter, it has once again slid back into the red with a net loss of €515 million (US$665 million). This is 28 per cent more than the €402 million loss reported in Q109 and a steep plunge from the €46 million profit posted in the fourth quarter of last year.

CEO Ben Verwaayen said the company is currently experiencing a strong increase in demand for key technologies such as IP, terrestrial optics and WCDMA/LTE, however a shortage of components in its supply chain negatively affected its sales.

“We were not able to fully satisfy customer demand for our products due to tightening components availability. This resulted in a weak financial performance this quarter, which does not reflect the overall underlying momentum within the company,” Verwaayen contended.

“We are encouraged by the continued progress in cost management highlighted by the year-over-year increase of 110 basis points in gross margin and continued decrease in operating expenses. This will continue throughout the year,” he added.

First quarter revenues declined 9.8 per cent year-on-year and 18.1 per cent sequentially to €3.247 billion. The company reported revenues of €3.598 billion in Q109 and €3.967 in billion in Q409.

Geographically by region, North American revenues remained stable with an increase of 0.1 per cent. However revenues for Europe, Asia Pacific and rest of world declined by 8.3, 18.2 and 22.3 per cent respectively.