Comment (0)As the table below shows, revenues are down year-on-year, but the company reported fourth-quarter and full-year net income, generated full-year operating profits and predicted improved operating margins and an improved cash position in 2012, helped by cuts in fixed and variable spending of €500 million (US$664 million). It also announced a scheme to syndicate its portfolio of 29,000 patents through a patent marketing specialist, a move it expects to "generate substantial proceeds."
Table 1: Alcatel-Lucent Q4 and Full Year 2011 Financial Highlights
| In millions of euros | Q4 2010 | Q4 2011 | Y/Y change | Full year 2010 | Full year 2011 | Y/Y change |
| Revenues | 4,763 | 4,150 | -12.9% | 15,658 | 15,327 | -2.1% |
| Gross margin | 35.1% | 34.4% | Decrease of 0.7 percentage points | 33.9% | 35.0% | Increase of 1.1 percentage points |
| Operating income | 281 | 210 | -25.3% | -70 | 251 | NA |
| Net income | 340 | 868 | 155% | -334 | 1,095 | NA |
| NA = not applicable | ||||||
While the company didn't provide details about how it would reduce its outgoings, recent reports suggest job cuts will be part of the cost-cutting process. (See Euronews: AlcaLu Job Cuts on the Cards?)
But while there are many positives to take from the vendor's earnings report, the year's financial details show that AlcaLu is far from healthy.
Full-year sales were down by more than 8 percent in Europe, while the revenue decline in Asia/Pacific was 7.9 percent. And while full-year sales in North America grew, they were down by 13 percent year-on-year in the fourth quarter.
Table 2: Alcatel-Lucent Q4 and Full Year 2011 Revenues by Region
| In millions of euros | Q4 2010 | Q4 2011 | Y/Y change | Full year 2010 | Full year 2011 | Y/Y change |
| North America | 1,669 | 1,452 | -13% | 5,750 | 6,039 | 5% |
| Asia Pacific | 893 | 787 | -11.9% | 2,928 | 2,697 | -7.9% |
| Europe | 1,532 | 1,309 | -14.6% | 5,081 | 4,671 | -8.1% |
| Rest of World | 768 | 708 | -7.8% | 2,237 | 2,289 | 2.3% |
| Total | 4,862 | 4,256 | -12.5% | 15,996 | 15,696 | -1.9% |
And in terms of product divisions there were few star performers in 2011, with the IP division being the only part of the company registering significant annual sales growth, up 8.3 percent to nearly €1.6 billion ($2.12 billion). Notably, the Enterprise division that AlcaLu tried unsuccessfully to sell reported a 2.4 percent full-year sales increase to just over €1.2 billion ($1.6 billion).
The dip in full-year revenues also looks to be something of a concern when compared with AlcaLu's rivals: Ericsson AB (Nasdaq: ERIC) reported a full-year increase in revenues of 12 percent for 2011, while Nokia Networks grew its sales by 11 percent (and even managed to grow 4 percent without the impact of the Motorola networks acquisition). (See Ericsson Suffers Margin Crunch and NSN Suffers in Q4.)
— Ray Le Maistre, International Managing Editor, Light Reading
