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Alcatel-Lucent looks for next generation recovery

Business looks to new products and services to maintain margin and cash flow

Alcatel-Lucent’s group revenues, excluding Managed Services and at constant perimeter, increased 6% year-on-year. At constant exchange rates, revenues, excluding Managed Services and at constant perimeter, were down 8%. The weight of next-generation activities continued to progress, it says, representing 76% of revenues compared to 70% in the year-ago quarter. Next-generation technologies revenues increased 15% year-over-year at actual rates and declined 1% at constant exchange rates.

Gross margin reached 34.8% of revenues, expanding 220 bps year-on-year, driven notably by improved profitability and favourable software mix across several business lines.

Commenting on the results, Michel Combes, CEO of Alcatel-Lucent, said: “Our second quarter 2015 results represent a significant milestone for Alcatel-Lucent, reflecting the first Q2 of free cash flow generation since the merger of Alcatel and Lucent in 2006. Alcatel-Lucent’s financial results for the first half of 2015 clearly show that the company has delivered on the key objectives of The Shift Plan, launched two years ago. The company is now well on track to complete its turnaround by the end of the year.

It also reports progress towards the proposed combination with Nokia "is well on track", in particular with regulatory approvals being secured in a number of jurisdictions.