Alcatel reported Q3 revenue of EUR 3.335 billion, up 1.4% compared with EUR 3.289 billion (up 2.7% at constant EUR/USD exchange rate) in the same period last year. The gross margin was 33.6%. Operating profit amounted to EUR 258 million, a 7.7% operating margin.
Third Quarter Business Update:
| Segment Breakdown | Third Qtr | Third Qtr | Second Qtr |
| In EUR million | 2006 | 2005 | 2006 |
 | | | |
| Revenues | | | |
| Fixed Communications | 1,363 | 1,282 | 1,363 |
| Mobile Communications | 994 | 1,092 | 1,007 |
| Private Communications | 1,001 | 928 | 1,034 |
| Other & Eliminations | (23) | (13) | (20) |
| Total | 3,335 | 3,289 | 3,384 |
| Income from Operations | | | |
| Fixed Communications | 151 | 121 | 133 |
| Mobile Communications | 64 | 116 | 80 |
| Private Communications | 50 | 64 | 51 |
| Other & Eliminations | (7) | (23) | (1) |
| Total | 258 | 278 | 263 |
Serge Tchuruk, Alcatel's Chairman and CEO, stated: "The third quarter once again confirmed Alcatel's leading position in the transformation of networks toward a high bandwidth, full IP architecture providing enhanced triple play services to end users and reducing operating costs for the carriers.
"In the wireline sector, this translated into increasing traction for our IP, access, optical and applications solutions in the carrier and enterprise markets where Alcatel's revenues (excluding the seasonal submarine activity) grew by over 10%. The strong inroads of Alcatel in the IP routing market were again highlighted by a near doubling of revenues over the same period last year. Likewise, terrestrial optics as well as enterprise applications revenues grew by over 20% and 30% respectively, with Alcatel's product portfolio clearly outpacing competition.
"This strong performance was partially offset by a decline in our wireless revenues, whose annualized growth had averaged 25% in eight successive quarters, and where the evolution toward IP technologies and new video services is still at an early stage."http://www.alcatel.com
