Alcatel-Lucent Q2 Loss Narrows, Sees Turnaround By Year-end; Stock Up

(RTTNews) - Shares of Alcatel-Lucent SA (ALU) were gaining around 6 percent in the morning trading in Paris after the French telecom equipment maker reported Thursday a narrower loss in its second quarter benefited by increased revenues and operating margin. The company also said it is now well on track to complete its turnaround by the end of the year.

For the second quarter, net loss attributable to equity owners of the parent was 54 million euros, compared to a loss of 298 million euros a year ago. Loss per share was 0.02 euros compared to a loss of 0.11 euros. Loss per ADS was $0.02, compared to loss of $0.15 last year.

Adjusted group net loss was 49 million euros or 0.02 euro per share, compared to loss of 290 million euros or 0.10 euro per share last year.

The company attributed the improvement in result to stronger operating profitability, as well as lower financial expenses and restructuring costs.

Adjusted operating income totaled 175 million euros, or 5.1 percent of revenues, compared to 136 million euros or 4.1 percent of revenues last year. Gross margin expanded 220 basis points year-over-year to 34.8 percent.

Revenues increased 5 percent to 3.45 billion euros from 3.28 billion euros in the prior year. Group revenues, excluding Managed Services and at constant perimeter, increased 6 percent. At constant exchange rates, Group revenues were down 8 percent.

Core networking revenues climbed 22 percent to 1.675 billion euros reflecting continued strong contribution from IP Routing in addition to improvements in both IP Transport and IP Platforms.

Next-generation technologies revenues increased 15 percent. The company noted that the weight of next-generation activities continued to progress, representing 76 percent of revenues compared to 70 percent in the year-ago quarter.

The company said its results for second quarter 2015 once again demonstrated good resilience in an overall soft spending environment notably in North America, with continued solid progress in margins and free cash flow.

North America revenues increased 2 percent, but declined by 18 percent at constant rates, reflecting a softer spending environment in the region. Europe's revenues increased 9 percent, driven by positive momentum in IP Transport and IP Routing. Asia Pacific posted a 3 percent increase.

Michel Combes, CEO of Alcatel-Lucent, said, "Our second quarter 2015 results represent a significant milestone for Alcatel-Lucent, reflecting the first Q2 of free cash flow generation since the merger of Alcatel and Lucent in 2006."

In Paris, Alcatel-Lucent shares were trading at 3.45 euros, up 5.67 percent.