Alcatel-Lucent Q4 Profit Climbs On Revenue Strength, Completes Shift Plan

(RTTNews) - French telecom equipment maker Alcatel-Lucent (ALU), which is being acquired by Finnish network equipment maker Nokia Corp. (NOK), reported Thursday higher profit in its fourth quarter with strong revenue growth. All segments, mainly Next-generation technologies, and all regions, including North America and Asia, recorded higher revenues.

Further, the company announced the successful completion of the Shift Plan, which was started in 2013, with the fulfilment of its major goals. According to the firm, the most emblematic goals being free cash flow positive and reaching 950 million euros of cumulative fixed costs savings.

Alcatel-Lucent's fourth- quarter Group share of net income was 589 million euros or 0.18 euro per share or $0.20 per ADS, compared to 0.08 euro or $0.10 per ADS last year. Adjusted net income Group share was 592 million euros

Excluding Nokia transaction related costs, Group share of net income reached 659 million euros, significantly higher than 271 million euros last year.

Adjusted operating income almost doubled to 560 million euros, or 13.5 percent of revenues, from last year's 284 million euros or 7.7 percent of revenues. Adjusted operating margin reached 13.5 percent, up 580 bps, reflecting the improvement in gross margin and relatively lower operating expenses.

Revenues climbed 13 percent to 4.16 billion euros from 3.68 billion euros last year. At constant rates, revenues increased 4 percent.

Group revenues, excluding Managed Services and at constant perimeter, increased 15 percent year-on-year and 6 percent at constant exchange rates.

Core Networking segment revenues were 2.047 billion euros, an increase of 14 percent at actual rates and 7 percent at constant rates. In the quarter, IP Routing revenues increases 17 percent and IP Transport revenues grew 19 percent. Access segment revenues were up 13 percent.

Next-generation technologies revenues climbed 36 percent year-on-year, and now represents 79 percent of revenues, compared to 67 percent in the year-ago quarter.

In the quarter, North America revenues increased 15 percent reflecting a strong end of year activity notably in terrestrial optics, wireless and fixed networks. Revenues in Europe grew 2 percent, while Asia Pacific posted 20 percent year-over-year growth , notably reflecting continued strength in Australia. In Rest of World, revenues were up 15 percent mainly driven by CALA.

Philippe Camus, chairman and CEO of Alcatel-Lucent, said, "Based on this success, the Group has now embarked on the next chapter of its story with Nokia and will continue to deliver value as part of a global leader in technology and services for an IP connected world."

On Wednesday, Nokia announced that it will hold 91.25 percent of the share capital and at least 91.17 percent of the voting rights of Alcatel-Lucent following settlement of the reopened offer, which is expected to occur on February 12. In total, Nokia will hold 88.07 percent of the share capital on a fully diluted basis.

In Paris, Alcatel-Lucent shares were trading at 3.01 euros, down 0.33 percent.¬