Alcatel-Lucent reported that its Q1 2008 revenues declined 0.5% year-over-year and 26.2% sequentially to Euro 3.864 billion. At constant Euro/USD exchange rate, revenues grew 6.3% year-over-year and declined 23.2% sequentially.
At constant exchange rate and on a year-over-year basis, Carrier revenues grew 1.7%, Enterprise revenues grew 8.4% and Services revenues grew 14.6%. The adjusted gross margin was 36.2% of revenues, of which approximately 0.9-percentage point is due to gains on currency hedging. Adjusted2 operating income1 was Euro 36 million or 0.9% of sales, including a Euro 31 million capital gain from the receipt of proceeds due to a sale of intellectual property rights.
"Considering the impact of the Euro/USD adverse shift, our revenue performance was in line with our expectations, with a year-over-year growth of 6.3%and a sequential decline in the mid point of our typical seasonal pattern of --20% to --25%. Our carrier business grew year-over-year at constant exchange rate, reflecting the solid performance of our wireline business, essentially driven by optics. Our wireless access business showed good resilience, as the expected decline in CDMA was more than offset by the strong year-over-year double-digit growth of our revenue in GSM, W‑CDMA and RFS. Our strategic initiatives to enhance growth in the Enterprise and Services businesses are paying off as we report a strong year-over-year growth in each of these segments at constant exchange rate. And our business in North America showed good year-over-year growth in US dollar terms," stated Patricia Russo, Alcatel-Lucent's CEO.
Q1 Revenue Breakdown By Geography
Europe -- 33%
North America -- 35%
Asia-Pacific -- 17%
Rest of World -- 15%
Some other highlights from the financial report:
- Alcatel-Lucent noted strength in its submarine activities where both revenues and orders doubled in the first quarter 2008.
- Fixed access activities were impacted by the ongoing decline in new subscribers to copper-based broadband access, with shipments of ADSL ports down 8% year-over-year to 6.6 million. However, the company saw continued growth in the FTTx market, with an increase in shipments of GPON solutions to a number of European, Korean and U.S. large customers such as AT&T, Verizon and France Telecom/Orange
- Alcatel-Lucent added ten new customers in IP routing and introduced its next generation 7750 SR and 7450 ESS.
- Alcatel-Lucent's GSM business grew year-over-year in a declining market, driven by network expansions in China, India, the Middle East and Africa. W-CDMA revenues more than doubled year-over-year, albeit from a low base, benefiting from the ramp-up in revenues at several key clients. CDMA revenues declined materially year-over-year, from an especially strong first quarter 2007. Radio Frequency Systems enjoyed very strong year-over-year growth, benefiting from surging demand in North America and China.
- Alcatel-Lucent's core switching business declined strongly year-over-year, as the rapid drop in legacy TDM voice was only partly offset by growth in mobile and fixed NGN.
