Alcatel-Lucent reported Q3 2009 revenues of Euro 3.687 billion, down 9.3% year-over-year and 5.6% sequentially. At constant currency exchange rates, revenue decreased 11.0% year-over-year and 3.5% sequentially. The adjusted operating income was Euro (11) million or (0.3%) of revenue, and the reported net loss (group share) was Euro (182) million or Euro (0.08) per share.
Alcatel-Lucent's CEO, Ben Verwaayen, state: "Our company continues its transformation journey. This quarter demonstrates both the relevance of our strategy through key customer wins and our capacity to consistently execute our plans with significant operational progress.
We are winning in areas of differentiation such as IP transformation, next generation broadband and wireless, application enablement and services. This is demonstrated in our wins with Qwest in merging IP and optics into a combined solution, Singapore's Nucleus Connect in application enablement, and the securing of LTE trials with France Telecom-Orange, Telefonica and Etisalat, bringing our total number of LTE trials to 16.
We have achieved significant operational progress. We are rapidly reshaping our cost and expense structure, having achieved 80% of our Euro 750 million target in annualized savings year to date. We generated Euro 362 million in free cash flow this quarter by improving our operating working capital metrics. Finally, robust investor reception to our Euro 1 billion convertible bond offering allowed us to further strengthen the balance sheet.
Against what remains a challenging market environment, we reiterate our view that our addressable market should be down between 8% and 12% at constant currency and that we will achieve an adjusted2 operating income1 around breakeven this year."
Some highlights:
- The carrier segment saw a double-digit decline in revenue, driven by 2G wireless access, TDM switching and terrestrial optics. The segment did see moderate growth in fixed broadband access, good growth in IP and strong growth in submarine optics, fixed NGN/IMS and W-CDMA.
- Enterprise revenue continued to decline at a double-digit rate. Applications software revenues grew at a strong double-digit rate and finally Services revenues grew at a low single-digit rate.
- From a geographic standpoint and in local currencies, revenue declined at a double-digit rate in both Europe (-13%) and in the rest of the world (-32%). On the other hand, revenue declined slightly in Asia Pacific (-1%). Finally, North America returned to moderate growth this quarter (+1%).
- The company estimates that it has achieved approximately 80% of its plan to reduce costs and expenses by Euro 750 million on an exit run rate by the fourth quarter 2009.
- Alcatel-Lucent reiterated its guidance for 2009. The company continues to expect the global telecommunications equipment and related services market to be down between 8% and 12% at constant currency in 2009.
