& 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
From The Founder
Light Reading sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Huawei Video Resource Center
TeliaSonera: Striving for Independence

2|12|16   |     |   (0) comments


Peter Lagergren discusses the importance of decoupling the network from services.
LRTV Huawei Video Resource Center
Ken Wang on U-vMOS

2|12|16   |     |   (0) comments


Ken Wang discusses how video will take of the traffic on carrier networks and become a basic service to provide to end users.
LRTV Documentaries
All Change in Video

2|11|16   |   33:12   |   (1) comment


At this moderated panel at 2020 Vision in Dublin, Alan Breznick, Cable/Video Practice Leader of Light Reading, sits down with Jeff Finkelstein, director of network architecture at Cox Communications, to discuss the rapidly changing video market.
LRTV Custom TV
Hosting in Ireland, Past & Present

2|10|16   |   16:07   |   (0) comments


Garry Connolly, president of Host in Ireland, presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
Women in Comms Introduction Videos
What's Hot in Mobile Commerce?

2|10|16   |   12:18   |   (1) comment


Claire Maslen, financial services relationship manager at the GSMA, talks about the development of the digital commerce sector and the types of relationships that mobile operators are developing to further their m-commerce strategies.
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (1) comment


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
AT&T Lights Fire Under 5G, Plans 2016 Trials
Iain Morris, News Editor, 2/12/2016
Andreessen Facepalms on Facebook Free Basics
Mitch Wagner, West Coast Bureau Chief, Light Reading, 2/10/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.