& cplSiteName &

Alcatel-Lucent's Q4 Inheritance

Ray Le Maistre
2/7/2013
50%
50%

Alcatel-Lucent reported its fourth-quarter and full-year 2012 financials early Thursday, but the numbers were always going to be overshadowed by the confirmation that Ben Verwaayen has relinquished his role as CEO and will hand it over to a successor in the coming months. (See Verwaayen Quits as Alcatel-Lucent CEO and AlcaLu Reports Q4 Loss of €1.37B.) Verwaayen will leave just as the storm clouds part slightly for the vendor, which looked in dire trouble only six months ago. Its financial situation has stabilized in recent months, aided by the access to fresh capital that followed the announcement of a corporate reorganization, setting up 2013 as a year in which AlcaLu might redeem itself and retain Tier 1 vendor status. (See Euronews: AlcaLu Gains on Credit Boost and Alcatel-Lucent Sharpens Its Focus.) So, what will the new CEO be inheriting? The fourth quarter provided a few reasons for optimism for the company, although, as usual, the main positives came from the IP division, which reported record quarterly sales of €574 million (US$770 million). It's probably not an exaggeration to suggest that without the IP unit, AlcaLu would have sunk by now. Total fourth-quarter revenues reached almost €4.1 billion ($5.5 billion), up 13.8 sequentially but down 1.3 percent from a year ago, while operating income (before one-time costs) was €66 million ($88.5 million, better than expected), about two thirds down on a year ago but much improved compared with the €181 million ($243 million) operating loss recorded in the third quarter. Gross margin was 30.4 percent, better than the 27.9 percent recorded in the third quarter but down from 34.4 percent a year ago. By comparison, Ericsson AB and Nokia Siemens Networks reported gross margin levels of 31.1 percent and 36 percent respectively in the fourth quarter. The fourth-quarter net loss, which includes restructuring, asset impairment and other one-time charges, was €1.37 billion ($1.84 billion). On the face of it there seems little here to stoke any optimism: Fourth-quarter financials are historically better than the third quarter's, so sequential improvements are to be expected. But there were some rays of hope. In addition to the stellar performance of the IP division, the important wireless unit (which includes 4G infrastructure) also reported improved sales on a sequential and year-on-year basis, while the same feat was achieved by the Software, Services & Solutions division, which generated revenues of €1.39 billion ($1.86 billion). That total included €240 million ($322 million) from the Network Applications business, up nearly 53 percent year-on-year thanks for subscriber data management and IMS-based 4G voice systems deployments at LTE operators in North America (though that suggests it is more of a one-off bump rather than the start of a trend). Encouragingly, revenues from North America hit €1.6 billion ($2.14 billion), making it the only region that showed growth (of 13.7 percent) compared with the fourth quarter of 2011. Verwaayen stated in the company's earnings report that AlcaLu is dealing quickly with its less profitable managed services contracts, reducing its costs quicker than expected, and is seeing "growth in both our order book and backlog." But the big question is, who will replace Verwaayen and will they be able to capitalize on the current strands of hope? Investors clearly have concerns that a handover might not help the company's chances of a full recovery as AlcaLu's share price is down more than 4 percent at $1.64. — Ray Le Maistre, International Managing Editor, Light Reading

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
light-headed
50%
50%
light-headed,
User Rank: Light Beer
2/21/2013 | 5:25:52 AM
re: Alcatel-Lucent's Q4 Inheritance
TiMetra Networks. The best 150M that ALU ever spent! Possibly the best acquisition in telecom history.
Educational Resources
sponsor supplied content
Educational Resources Archive
Light Reading’s Upskill U is a FREE, interactive, online educational resource that delivers must-have education on themes that relate to the overall business transformation taking place in the communications industry.
NEXT COURSE
Wednesday, September 14, 1:00PM EDT
What Is Agile?
Kent J. McDonald, Product Owner, Agile Alliance
UPCOMING COURSE SCHEDULE
Friday, September 16, 1:00PM EDT
How to Implement Agile
Alan Bateman, Director, Agile Transformation
Wednesday, September 21, 1:00PM EDT
What Is DevOps?
Colin Kincaid, CTO, Service Provider, Cisco
Friday, September 23, 1:00PM EDT
How to Implement DevOps
,
in association with:
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Between the CEOs
CEO Chat: UXP Systems' Gemini Waghmare

8|26|16   |     |   (0) comments


Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
LRTV Custom TV
F5 Virtual Network Function Integrations With Partner Orchestration Platform

8|24|16   |   6:38   |   (0) comments


F5's Kishore Patnam, product manager for F5's service provider solutions, discusses why service providers are moving towards virtualization and how his clients are utilizing F5's solutions.
Between the CEOs
CEO Chat: Intel's Alexis Black Bjorlin

8|17|16   |   06:23   |   (0) comments


Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Telecom Innovators Video Showcase
Accelerating Telecom Digital Transformation With Nominum DNS

8|1|16   |   12:04   |   (0) comments


Light Reading's Steve Saunders gets an update from Nominum CEO Gary Messiana on how his company is helping carriers on the digital transformation journey.
LRTV Custom TV
Reinventing Operations for a Virtual, Software-Defined World

7|28|16   |   5:23   |   (0) comments


Heavy Reading Senior Analyst Jim Hodges speaks with Accenture's Larry Socher and Matt Anderson about what service providers must do to transform their business to get the benefits of SDN and NFV including: leveraging DevOps, introducing real-time OSS and implementing analytics.
Women in Comms Introduction Videos
Fujitsu Sales Leader Shares Lessons Learned

7|27|16   |   5:12   |   (1) comment


As Fujitsu's only female sales leader, Annie Bogue knows the importance of asking for what you want, being flexible (she's been relocated five times), keeping a meticulous calendar, 'leaning in,' working harder than everyone else around you, being aware and more.
Telecom Innovators Video Showcase
VeEX Test & Measurement Solutions

7|25|16   |   08:57   |   (0) comments


Cyrille Morelle, president and CEO of VeEX Inc., talks test and measurement with Light Reading's Steve Saunders at BCE 2016. This includes innovative products such as VeSion Cloud-Based platform for network monitoring; MTTplus Modular Test platform for Access, Business, Carrier Ethernet, Transport and Core services; and OPX-BOX+ for Fiber Optics.
LRTV Custom TV
VeEX: Live From BCE 2016

7|25|16   |   03:20   |   (0) comments


VeEX's Senior Director of Business Development, Perry Romano, explains how VeEX provides tools to help install, maintain, monitor and manage network infrastructure efficiently and effectively. The portfolio of products on display include the RXT-6000, MTTplus and TX300s.
LRTV Custom TV
Real-Time Telemetry & Analytics for Intelligent SDN Orchestration

7|25|16   |   03:09   |   (0) comments


Packet Design CEO Scott Sherwood discusses how real-time network telemetry and analytics are enabling a new breed of SDN orchestration applications.
From the Founder
The Russo Report: Driving Disruption

7|25|16   |   07:44   |   (2) comments


In the first episode of a four-part series, Light Reading Founder and CEO Steve Saunders and Calix President and CEO Carl Russo drive around town discussing the disruptive mega-changes in the communications industry and where hope lies for service providers to meet the escalating demands of the cloud.
LRTV Custom TV
NetScout: Maximizing Enterprise Cloud for Digital Transformation

7|20|16   |   04:53   |   (0) comments


Light Reading Editor Mitch Wagner talks to NetScout CMO Jim McNiel about maximizing the benefits of enterprise cloud and digital transformation while minimizing potential pitfalls with a proper monitoring and instrumentation strategy.
Women in Comms Introduction Videos
Ciena's VP Offers a Career Crash Course

7|20|16   |   4:14   |   (2) comments


How did Ciena's Vice President of Sales, Angela Finn, carve out her career path? Simple, she tells WiC. She stayed true to her company, customers and principles. She shares her advice for women on how to be authentic and credible, as well as for companies that want to make a real change to their culture and practices.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 1, 2016, The Westin Times Square, New York, NY
December 6-8, 2016, The Westin Excelsior, Rome
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cisco Developing 'Monica' Digital Assistant
Mitch Wagner, West Coast Bureau Chief, Light Reading, 8/22/2016
FirstNet: A Billion-Dollar Boondoggle?
Dan Jones, Mobile Editor, 8/26/2016
WiCipedia: Should Men Be Included? & Olympians Face Discrimination
Eryn Leavens, Special Features & Copy Editor, 8/26/2016
Google Fiber Can't Be Called a Failure
Carol Wilson, Editor-at-large, 8/26/2016
Google Fiber Downsizing Not Confirmed
Mari Silbey, Senior Editor, Cable/Video, 8/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO Steve Saunders and UXP Systems CEO Gemini Waghmare discuss the strategic importance of digital identity for operators in the midst of transformation.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
Live Digital Audio

Bridging the tech skills gap is a major challenge for service providers and suppliers alike today – and the challenge is two-fold when it comes to increasing the number of women in the comms space. Level 3 Communications has made it a priority to overcome both challenges by implementing several unique programs focused on building the right candidates from within – in addition to filling the funnel by supporting STEM and other education programs. During this radio show, you’ll learn about these programs from Mary Beth McGrath, SVP of Global Talent Management at Level 3, and the best ways to bridge your own skills gap so that you are motivated and equipped for change. Plus you’ll have the chance to ask Mary Beth your questions live on the air.