Alcatel reported a net profit in Q1 of EUR 80 million, with all business segments positive -- it's first quarterly profit in three years. The company also upgraded its financial outlook for the rest of 2004, noting that the prolonged decline in sales is now ending and that operating margins are improving due to the restructuring steps it has taken. Alcatel's overall sales for Q1 2004 were EUR 2.740 billion, compared with EUR 2.828 billion in Q1 2003, down 3% at actual exchange rate and up 2% at a constant rate. Income from operations amounted to EUR 80 million, compared with a loss of EUR (150) million in the same period last year. Net income (pre-goodwill) for the quarter was registered at EUR 234 million or diluted EUR 0.18 per share (USD 0.22 per ADS) and net income after goodwill at EUR 134 million or diluted EUR 0.10 per share (USD 0.12 per ADS).
"Our performance in Q1 2004 is a clear confirmation that Alcatel is on the right track. With the sales decline stopping, our margins can now benefit from the intense restructuring which has been carried out. We are pleased to see, in this traditionally weak quarter, positive operating income generated in all segments and our earnings per share getting back in the black , said Serge Tchuruk, Alcatel's Chairman and CEO. "At this point, we are upgrading our expectations of year over year revenue growth going forward, both for the coming quarters and for the full year 2004. For the second quarter, as well as for full year, we expect high single digit year over year sales growth at a constant EUR/Dollar rate, which translates into significant growth at the current rate."
Some highlights:
- Sales about stable year over year
- Gross margin up at 36.6% compared to 30.3% last year.
- Income from operations at EUR 80 million at 2.9% of sales
- A total of 5.5 million DSL lines were delivered during the quarter
- The IP service routing business added nine new customers in the quarter, making a total of twenty customers to date.
- Twelve new customers were added in the quarter for NGN/VoIP products
- While the optics revenue has not yet reflected the market upturn, nine new customers were added for the data-aware OMSN products and ten new customers in metro WDM.
