Alcatel-Lucent see revenue drop in Q3, but still make a profit

Alcatel-Lucent reported a drop in revenue during the third quarter, but the global telecommunications corporation still made a €194 million (£166 million) profit. However, the future looks murky, the company announced at the end of last week.

Revenue for the quarter ending September 30 was €3.8 billion, down 6.8% year on year. The €194 million profit is an improvement over the same period last year, when it made €25 million.

Most of Alcatel-Lucent's divisions saw their revenue drop during the third quarter. Worst off were the wireline and network application divisions, which both saw sales decrease by more than 20%.

Sales grew in the enterprise and the IP (Internet Protocol) divisions, up by 8.9% and 2.7% respectively. Alcatel-Lucents's service router business helped drive growth for the IP division. Revenue in the enterprise division got a boost from data networks, as companies invested more in core and access networks, including Wi-Fi, Alcatel-Lucent said.

Alcatel-Lucent's numbers compare unfavourably with those of its competitor Ericsson. The Swedish company increased its revenue by 17% to 55.5 billion Swedish kronor (£5.25 billion), while its net income for the quarter was 3.8 billion kronor (£360 million).

The grim economic situation, especially in Europe, means Alcatel-Lucent is in for a challenging last three months of 2011. The company now expects weaker revenues than initially planned in the fourth quarter, it said.