Alcatel’s second quarter 2006 results have revealed that revenues were up by 7.6% at Euro 3,384 million compared with Euro 3,145 million in the same period last year. The gross margin was 33.6%.
Operating profit weighed in at Euro 263 million, a 7.8% operating margin, and included a Euro 12 million impact from a capital gain resulting from disposal of fixed assets.
“While preparing for the merger with Lucent Technologies and the Thales transaction, Alcatel achieved good revenue growth in the second quarter, above market rate.” commented Serge Tchuruk, Chairman and CEO. “Our strong performance in the wireline segment confirmed Alcatel’s leading position in the network transformation to an all-IP infrastructure to support triple play services. We are particularly pleased with the resulting 4-fold year over year revenue increase in IP routing and aggregation as well as our strong position in the DSL and fiber access markets.
“With the industry consolidation gaining momentum, the wireless market environment becomes even more competitive as some players are aggressively trying to reposition themselves. In this context, we remained deliberately selective in addressing contract opportunities involving mature technologies. At the same time we continued to invest in key future wireless technologies and applications to develop a leading position in next generation networks. The forthcoming Lucent merger will bring added scale into related R&D programs.”
In the mobile communications sector, second quarter revenue increased by 5.1% to Euro 1,007 million compared with Euro 958 million in the same period last year. Revenues were said to be strong in the 2G mobile radio business with ‘solid growth’ in the emerging markets, especially China, while the 3G product family is generating a growing revenue stream, where a new win in Malaysia was registered during the quarter.
Video and payment applications also registered a significant revenue increase, says Alcatel. Mobile operators confirmed their interest to implement Mobile TV services, where the company recorded several wins in the quarter.
Although revenues are still said to be marginal in the WiMAX market, recent trends are claimed to confirm the growing acceptance of the Alcatel solution, as demonstrated by an important win with one of the major operators in North America, it claims.
Operating profit in the sector amounted to Euro 80 million, representing a 7.9% operating margin, with investments in the NGN/IMS core, 3G and WiMAX product offering continuing to impact margins, in a competitive pricing environment, says Alcatel.