Alcatel-Lucent Swings To Profit In Q4, Receives Offer For Enterprise Unit

(RTTNews) - French telecom equipment maker Alcatel-Lucent SA (ALU) Thursday reported a profit for the fourth quarter compared to a hefty loss last year, reflecting improved margins. Revenues, however, edged down from last year. The shares are up about 9 percent in Paris.

The company also said it received a binding offer from China Huaxin, a technology investment company, for acquisition of Alcatel-Lucent Enterprise for a value of 268 million euros on an enterprise value basis, and at a currently estimated 237 million euros on an equity value basis. Alcatel-Lucent will retain a minority stake of 15 percent. The firm said it is entering exclusive discussions with China Huaxin. A definitive acquisition agreement is expected to be signed during the second quarter of 2014, and closing is targeted to take place in the third quarter of 2014.

Further, the firm said it is on track to achieve the Shift Plan 2015 targets, focusing on continued cost reductions, cash generation and profitable growth. The company noted that its fixed costs savings for the year 2013 was above its target range.

For the fourth quarter, Alcatel-Lucent posted net income group share of 134 million euros (about $181 million) or 0.05 euros per share, compared to a loss of 1.56 billion euros or 0.69 euros per share in the previous year.

Adjusted operating income climbed to 307 million euros from 115 million euros last year, that reflected a significant improvement in profitability of both Core Networking and Access segments. Adjusted operating margin grew to 7.8 percent from 2.8 percent last year.

Revenues for the quarter edged down 0.1 percent at constant exchange rates to 3.93 billion euros from 4.10 billion euros a year ago. Meanwhile, revenues of Core Networking and Access edged up 0.4 percent at constant exchange rates to 3.70 billion euros.

Sequentially, at constant exchange rates, Group revenues increased 8.8 percent and 8.9 percent for Core Networking and Access segments, reflecting strong performance in IP Platforms, IP Transport and Wireless.

For the year 2013, the company had fixed costs savings of 363 million euros, of which 104 million euros was in the fourth quarter. This is significantly above the 250 million euros to 300 million euros target for the year as a whole, the firm said.

Looking ahead, the company continues to expect revenues for the Core Networking segment of more than 7 billion euros with an operating margin exceeding 12.5 percent by 2015.

In Paris, Alcatel-Lucent shares are currently trading at 3.29 euros, up 0.26 euros or 8.59 percent, on a volume of 35.65 million shares.