Alcatel-Lucent, which is implementing a new revival strategy, today said its second quarter 2014 revenues rose 0.7 percent to €3,279 million.
Revenues excluding managed services, reflecting the termination or restructuring of loss-making contracts, grew 5 percent. Wireless – especially LTE roll-outs in China and US – contributed to the growth in Q2.
The telecom network vendor posted net loss of €298 million.
Reflecting the improvement in net loss, its gross margin reached 32.6 percent of revenues in the second quarter, improving by 140 basis points year-on-year. Alcatel-Lucent said the improvement was essentially driven by cost savings.
Its subsidiary Alcatel-Lucent Submarine Networks (ASN) will be planning an IPO to fund in order to strengthen its presence in telecom submarine systems and its diversification into the Oil & Gas market, to increase its visibility and to optimize capital allocation.
Alcatel-Lucent will retain the majority of the ownership. Subject to market conditions, this capital opening is targeted to take place in the first half of 2015.
Michel Combes, CEO of Alcatel-Lucent, said: “Alcatel-Lucent recaptures the full control of its destiny and can close the first step of its transformation. The Group can now embark on the second chapter of its turnaround story: innovate, transform and grow while keeping intact the commitment of returning to positive free cash flow in 2015.”
Core Networking segment revenues dipped 10 percent to €1,369 million in Q2 2014.
IP Routing revenues decreased 7 percent to €561 million, with continuing growth in APAC and steady performance in EMEA.
Our 7950 XRS IP Core router registered 4 new wins in Q2, including Chorus in New Zealand, for a total of 28 wins to date.
Nuage Networks added 3 new wins in the quarter, totaling 8 customers with traction across extra-large enterprises, cloud service providers and service providers.
IP Transport revenue declined 6.2 percent to €484 million. Within IP Transport, positive trends in EMEA and APAC were fueled by our WDM portfolio, but were not enough to offset legacy declines.
Within WDM, 1830 Photonic Service Switch (PSS) represented 43 percent of terrestrial optical product revenues in the quarter, up 12 percentage points, and now has over 480 customers.
100G shipments represented 36 percent of total WDM line cards shipments in Q2 2014 compared to 27 percent in Q2 2013; It has now shipped over 15,000 100G ports lifetime-to-date.
IP Platforms revenues decreased 19.2 percent to €324 million in Q2 2014, reflecting its strategy to rationalize the product portfolio.
Alcatel-Lucent noticed strong growth in Customer Experience Management as well as Payment & Policy.
Access segment revenues increased 9.5 percent to €1,907 million.
Wireless Access revenues rose 28.1 percent to €1,299 million. Growth in the second quarter was mostly driven by performance in LTE which more than doubled compared to the year-ago quarter, led notably by the US and China. This growth was partially offset by continued declines in 2G and 3G technologies, which represented less than 25 percent of our wireless access revenues in Q2.
LTE overlay wins in the second quarter include a frame agreement with Telenor Group as well as America Movil in the Dominican Republic.
Fixed Access revenues were rose 2.9 percent to €521 million. Ongoing trends continued, as both copper and fiber technologies continued to show strong performance, with notable growth in Europe and in Asia-Pacific outside of China.
Managed Services revenues decreased 62.8 percent to €77 million, reflecting its strategy to terminate or restructure loss-making contracts.
Alcatel-Lucent said North America revenue decreased 2.6 percent, Europe increased 6 percent when excluding Managed services and Asia Pacific surged 25.2 percent, driven by LTE network roll-outs in China. In the rest of World, MEA declined at a mid single digit, while CALA remained challenging.
editor@telecomlead.com
