AlcaLu Grows But Pressures Weigh
Without fluctuations in currency exchange rates, the revenues would have been up by 10.4 percent.
But its adjusted operating income (after one-time costs) -- the figure that financial analysts care more about -- was below market expectations at €108 million ($155 million), though much better than the €28 million ($40 million) from a year ago.
Adjusted net income (after one-time costs) was €82 million ($118 million) for an adjusted EPS (earnings per share) of €0.04, much better than last year's net loss of €139 million ($200 million), or €0.06 per share.
Gross margins, at 35.8 percent, were down slightly compared with a year ago.
Sales growth and profitability are exactly what CEO Ben Verwaayen is looking for in his quest to turn AlcaLu into a "normal company" following its post-merger years of decline and losses.
And the CEO, who recently shuffled his management team to reflect the changing nature of AlcaLu's business, clearly believes the recovery process will continue, as he reaffirmed the vendor's full-year outlook to grow faster than the market and report "an adjusted operating margin above 5% of our 2011 sales." (See AlcaLu Shuffles Its Senior Team.)
Despite all the positives, AlcaLu's adjusted operating profit, coupled with fears that the communications infrastructure market is entering a rough patch -- as signalled by recent results from Cisco Systems Inc. (Nasdaq: CSCO) and Juniper Networks Inc. (NYSE: JNPR) -- sent AlcaLu's share price tumbling on the Paris exchange Thursday morning, where it sank by 8.5 percent to €3.09. (See Juniper Darkens 2011 Outlook and Cisco Preps for Layoffs.)
In terms of business line performance, AlcaLu's IP division was again a star performer, with revenues up nearly 28 percent compared with a year ago to €406 million ($584 million), while the optical business grew 3.7 percent to €645 million ($927 million). Wireless revenues grew 5.7 percent to €1.08 billion ($1.55 billion).
North America proved a strong region for AlcaLu in the quarter, revenues from China grew 40 percent to help boost Asia/Pacific's numbers and revenues from Central & Latin America grew 30 percent year-on-year.
— Ray Le Maistre, International Managing Editor, Light Reading