Alcatel reported Q2 sales or EUR 3.078 billion, compared with EUR 2.967 billion in the second quarter 2003, up 3.7% and 7.2% at a constant EUR/USD exchange rate. Net income pre-goodwill for the quarter was EUR 125 million, or diluted EUR 0.09 per share (USD 0.11 per ADS).
Some highlights for the quarter:
- Fixed communications : Revenue was stable at EUR 1.353 billion from EUR 1.360 billion in Q2 2003. Significant growth was registered in broadband access, data networking, and solutions. In broadband access, growth was seen both in Western Europe and in North America, with new business ramping up in emerging markets such as Turkey and Egypt.
- DSL : 4.8 million DSL lines were delivered during the quarter, up 50% over the same period last year, bringing the year to date cumulative deliveries to 10.3 million.
- IP Business : 10 new customers were added in Q2 for edge service routing, which included customers in the U.S., China, and Belgium. A total of 30 customers exist to date in addition to 40 on-going trials, including a new one added in the UK this quarter.
- Softswitching : Five new customers were added during the quarter for various softswitch solutions, resulting in a cumulative total of 26 customers for the softswitch and over 50 customers for NGN/VoIP solutions to date.
- Optical networks: growing momentum was seen in North America with deployment of cross connects, in particular for metro applications for both fixed and wireless networks, and in Western Europe where the complete optical portfolio has been deployed as service providers focus on building out their metro networks. Submarine networking remains depressed.
- Voice networking : the decline continued, though slowing down by shifting the focus to revenue generating maintenance service of the installed base.
- Mobile communications : revenue increased slightly to EUR 842 million from EUR 834 million in Q2 2003, impacted by the transitioning to a new product in wireless transmission and some slippage in revenue recognition in mobile networks.
- Private communications : revenue increased by 7.0% to EUR 929 million compared with EUR 868 million in Q2 2003. The IP/PBX business registered a solid quarter with the activity continuing to grow, particularly in Europe, once again solidifying its leadership position. Genesys also continued to increase its business, confirming its traction in North America where some significant wins were registered. The enterprise data business was soft during the quarter, partly due to IT spending being under scrutiny in the U.S.
- Gross margin : 38.3%, compared to 31.8% for the same time last year.
- Geographical distribution of sales : W. Europe: 43%, Other Europe: 7%, North America: 17%, Asia: 16%, RoW: 17%
