French telecommunications equipment maker Alcatel-Lucent SA (ALU) on Friday reported a surge in profit for the fourth quarter, helped by some deferred tax benefits, even as revenues declined amid broad-based weakness, particularly pronounced in Europe. The company also reported its first annual profit in six years and said it expects higher operating profitability in 2012.
Net income (group share) increased to 868 million euros or 0.29 euros per share in the fourth quarter from 340 million euros or 0.13 euros per share last year. Earnings per ADS rose to $0.38 from $0.17.
These figures report the Genesys call center business, which will be disposed, as discontinued operations and include a 353 million euros benefit associated with the increase of the deferred tax assets in the U.S. and purchase price adjustments.
Adjusted net profit (group share) rose to 0.19 euros per share from 0.14 euros per share.
Revenues for the recent quarter dropped nearly 13 percent to 4.15 billion euros from 4.76 billion euros in the comparable period. Adjusted revenues slid 12.5 percent.
Segment-wise, Networks revenues dropped over 16 percent to 2.48 billion euros with a 10.6 percent decline in IP revenues and a 11.2 percent slide in Optics revenues, while Wireless revenues declined 22.8 percent. Within the segment, wireline revenues fell over 14 percent from last year.
Software, Services & Solutions generated 1.315 billion euros in the quarter, down 5.5 percent from last year as Services revenue dropped 4.4 percent and revenue from Network Applications fell 12.8 percent.
Geographically, revenues fell 13 percent in North America, nearly 12 percent in Asia Pacific and 14.6 percent in Europe. Segmental and geographical breakup is on an adjusted basis.
The European debt crisis and competition from China are causing challenges to Alcatel-Lucent and its peers. The company is said to be cutting its European workforce by up to 1,800 positions.
Full-year net income attributable to equity owners of the parent was 1.1 billion euros or 0.42 euros per share, compared to a loss of 334 million euros or 0.15 euros per share last year, clocking the first profit in six years after Alcatel SA and Lucent Technologies merged in 2006.
Annual revenues slipped to 15.33 billion euros from 15.66 billion euros. The prior-year figures have been re-presented to reflect the impacts of discontinued operations.
In addition, the board has recommended not to pay a dividend for fiscal 2011.
Further, the company aims to achieve in 2012 an adjusted operating margin higher than the 3.9 percent reported in 2011, while reaching a strong positive net cash position at the end of 2012.
The stock closed in Paris lower by 0.20 percent at 1.50 euros on a volume of 40.04 million shares.
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