Alcatel-Lucent Profit Climbs

(RTTNews) - French telecom equipment maker Alcatel-Lucent SA (ALU) Friday said its fourth-quarter profit increased significantly from the prior year, helped by lower expenses and increased benefits from income tax. The company expressed confidence that it would reach its positive free cash flow target in 2015.

Michel Combes, CEO of Alcatel-Lucent, said: "Our fourth quarter and full year 2014 results underline the success of our turnaround. Through the execution of The Shift Plan, we have improved our underlying profitability and free cash flow profile while we have solidified the entire organization."

Net income, group share, climbed to 271 million euros ($311 million) from 134 million euros in the year-ago period. The company attributed the increase to lower financial expenses and higher income tax benefits.

Adjusted net income, group share, was 278 million euros, while it totaled 147 million euros during the same period last year.

Gross margin expanded 130 basis points to 34.7 percent, driven by favorable mix. Sequentially, the improvement was 70 basis points was primarily due to the reduction of fixed operations costs.

Revenues for the latest-quarter were 3.682 billion euros. Quarterly proforma revenues totaled 3.763 billion euros in the previous year.

Revenues for the Group excluding Managed Services, reflecting the termination or restructuring of loss-making contracts, declined 3 percent year-on-year. At actual rates, Group revenues excluding Managed Services increased 2 percent year-on-year.

Core Networking segment revenues grew 1 percent to 1.802 billion euros, driven by growth in IP Routing.

In Access segment, revenues decreased 11 percent to 1.871 billion euros with a 9 percent drop in Wireless Access.

Alcatel-Lucent had previously said it planned to offer to retirees of the US Management Pension Plan who are receiving monthly pension benefit payments the opportunity to elect to convert those payments into a single, lump sum payment. Today the company said it is now in a position to extend this one-time offer to about 32,000 retirees and former employees and related beneficiaries of the US Inactive Occupational Pension Plan.

The offer will run concurrently with the previously announced offer, and is expected to be formally communicated to eligible individuals later this year.

Looking ahead, Combes said, "Entering 2015, we are in a strong position to capitalize on profitable growth opportunities and will focus on operational excellence and quality of service. The achievements we have made in our product portfolio and operational transformation make us confident we will reach our positive free cash flow target in 2015."

The stock slipped 0.2 percent in early trade to 3.16 euros.