Alcatel-Lucent Posts Smaller Loss In Q1

(RTTNews) - French telecom equipment maker Alcatel-Lucent SA (ALU) reported Friday a narrower net loss in its first quarter, benefited by higher operating results and margin strength, despite weakness in North America and Europe.

For the first quarter, reported net loss (Group share) attributable to equity owners of the parent totaled 73 million euros, or 0.03 euros per share, including the negative impact from Purchase Price Allocation or PPA entries of 8 million euros. Loss per American Depository share or ADS amounted to $0.04 this quarter.

The company considers Enterprise business unit, of which majority is being sold to China Huaxin, as discontinued. Treating Enterprise as continued, the first-quarter pro forma net loss group share was 101 million euros or 0.04 euros per share.

The prior-year quarter's proforma net loss (Group share) was 353 million euros, or 0.15 euros per share. Loss per ADS was $0.19. The company noted that the 2013 figures are re-presented to reflect accounting of Enterprise as a discontinued operation in the latest first quarter.

According to the company, the significant improvement in net result reflected higher level of operating income, lower restructuring charges and a significant reduction in net financial losses.

Excluding the PPA entries, quarterly adjusted net loss (group share) was 65 million euros or 0.02 euros per share, or $0.03 per ADS. The prior year's adjusted loss was 339 million euros or 0.14 euros per share, or $0.18 per ADS.

Adjusted operating income was 33 million euros, compared to prior year's pro forma adjusted operating loss of 179 million euros. The turnaround reflected a significant improvement in profitability in Core Networking and a reduction of losses in Access, the company noted.

The firm's quarterly revenues were 2.96 billion euros, as against 3.07 billion euros during the corresponding period last year.

At constant exchange rates and comparable perimeter, with accounting of Enterprise as a discontinued operation, the quarterly revenues edged up 0.3 percent.

Managed Services business decreased by half reflecting its strategy to terminate or restructure loss-making contracts.

Revenues, excluding Managed Services, were up 3.9 percent year-on-year. Core Networking segment revenues grew 6.9 percent, with strong contribution from IP Routing.

Asia Pacific posted almost 20 percent year-over-year growth, driven by activity in Japan and by network roll-outs in China.

Further, Alcatel-Lucent said it intends to implement, in 2015, a one-time offer to about 45,000 U.S. retirees and former employees and related beneficiaries to receive a single, lump-sum payment, instead of their current monthly pension benefit payments.

Regarding the 268 million euros worth binding offer from China Huaxin for the Enterprise unit, the company said the review by the workers council is now completed. Closing of the deal would take place in the third quarter, subject to certain other conditions.

It was in February that the Chinese technology investment company offered to buy 85 percent of Alcatel- Enterprise. Alcatel-Lucent will retain a minority stake of 15 percent.

In Paris, Alcatel-Lucent shares are gaining 0.13 euros or 4.53 percent, and trading at 3.07 euros.