Alcatel-Lucent Reports First Yearly Profit

After six years, Alcatel-Lucent is turning the corner and showing a profit, the company's lightRadio is in the field and it's going to license its patents.

By Sean Michael Kerner | Posted Feb 10, 2012
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In April of 2006, U.S. based Lucent merged with France's Alcatel in a merger that created the telecom giant. Little did the company know back then that it would take until now to actually turn a profit.

Alcatel-Lucent (NYSE:ALU) reported its fourth quarter fiscal 2011 and full year results Friday morning. For the fourth quarter, net revenues were EUR 4.3 billion, a decline of 11.2 percent on a year-over year basis. Net income for the quarter came in at EUR 868 million. For the full year, revenues were reported at EUR 15.7 billion, which is a 1.9 percent year over year gain. Net income for the year was reported at EUR 1.1 billion.

"It's important to note that for the full year, we did achieve positive net income and it's the first time since the merger," Paul Tufano, ALU's CFO said during the company's earnings call. "I think that's a significant accomplishment and also is part of the promise we made in 2008."

Moving forward, ALU has now entered into a deal with RPX Corporation to license approximately 29,000 patents that ALU holds. ALU CEO Ben Verwaayen stressed that his company isn't selling their patents, they're just finding a new way to help recognize revenues from them.

In terms of hardware, Verwaayen noted that his company is doing well in the IP service router segment. ALU competes against Juniper and Cisco for service provider share. Cisco announced this week that it was growing its earning thanks to service providers. In contrast, Juniper announced in January that it wasn't growing as fast as expected due to slowing service provider spending.

"If you look to IP service routers and the whole business around that 26 out of the 30 top Tier 1 players in the world have now Alcatel-Lucent in their networks," Verwaayen said.

ALU is looking to expand its routing presence thanks to the FP3 chip that was announced in June. The FP3 is a 400 Gbps chip that is aimed at enabling the next generation of bandwidth needs.

ALU is also looking to profit in 2012 from its lightRadio technology. The lightRadio was first announced in February of 2011 as a better way to manage the needs of mobile broadband operators.

"If you look to lightRadio, we are in trial, in field. It's no longer just an innovation," Verwaayen said. "It's a reality in the field, and I think that you will see that by the end of 2012, it's commercially available."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals. Follow him on Twitter @TechJournalist.

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