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Post-Earnings Scrutiny - Alcatel-Lucent

Editor Note: For more information about this release, please scroll to bottom.

LONDON, August 7, 2014 /PRNewswire/ --

Investor-Edge.com has issued complimentary post-earnings research on Alcatel-Lucent (NYSE: ALU). The company was featured in the headlines on Thursday, July 31, 2014, for reporting its earnings result for the second quarter 2014. Key highlights of the Company's Q2 announcement were a 5.0% year-on-year growth in group revenues (excluding Managed Services), and gross margin improvement of 140 basis points year-over-year to 32.6%. Our free coverage report can be accessed at:


Earnings Overview  

During the reported quarter, the Company's sales from the Asia-Pacific region were up significantly by 25.2% year-over-year to €667 million, driven by LTE network rollouts in China. Alcatel-Lucent is an LTE network vendor for China Mobile, the world's largest mobile operator, and the Company had won a contract of up to €750 million to help China Mobile to move toward to an all-IP, "ultra-broadband" network. Sales from the European region were up 6% year-over-year (excluding Managed services). The Company also recorded a 2.6% year-over-year decline in sales from North America, a mid single digit decline in MEA (Middle East and Africa) region, and continued to see challenges in the CALA (Caribbean and Latin America) region. The company's adjusted operating income increased three folds to €136 million from €45 million in Q2 2013. During Q2 2014, positive segment operating cash flow was at €96 million, compared with negative segment cash flow of €41 million in Q2 2013. This improvement was mainly a result of an increase of the Access segment operating income. The free research on ALU can be downloaded as in PDF format at:


Alcatel-Lucent is benefiting from its "The Shift Plan" (announced in June 2013) with €94 million of fixed cost savings in Q2 2014 and cumulative fixed cost benefits of €572 million till date. The company also announced its intent to explore the capital opening for its subsidiary Alcatel-Lucent Submarine Networks (ASN) through an IPO, to raise funds to strengthen company's leadership in telecom submarine systems and also diversify into the Oil & Gas market, to increase its visibility and to optimize capital allocation.

CEO of Alcatel-Lucent, Michel Combes, stated in the earnings press release that the improvements achieved in the second quarter makes it the fourth consecutive quarter to achieve consistent delivery under "The Shift Plan". Mr. Combes added that the company can close the first phase of its transformation as a result of the upcoming reimbursement of senior secured loan in August 2014 and the subsequent recovery of the full ownership of its patents. Moving forward, the CEO sees the company embracing the second phase of its turnaround story by focusing on innovation, transformation, and growth, while maintaining its commitment to return to positive free cash flow in the upcoming year.

The Paris-based Telecom equipment company's quarterly revenues grew 0.7% year-on-year at constant exchange rates and comparable perimeter to €3.28 billion, in line with the Bloomberg analysts' expectation. Alcatel-Lucent's reported net loss of €298 million, or €0.11 per share, compared with a net loss of €885 million, or €0.37 per share during the second quarter of 2013, with the improvement mainly explained by an impairment charge of €552 million in Q2 2013. Analysts at Bloomberg expected a net loss for the second quarter at €84.24 million or €0.02 per share. Sign up and read the free analyst's notes on ALU at:


Stock Performance  

On Thursday, July 31, 2014, after the earnings release, Alcatel-Lucent's shares plummeted 10.68% to close the session at $3.43. However, at the last close, Wednesday, August 06, 2014, the company's shares gained 2.17% to end the day at $3.30. The company's shares oscillated between $3.22 and $3.34 during the trading session. A total of 5.84 million shares were traded, lower than its three months average volume of 9.35 million shares. Alcatel-Lucent's shares have fallen by 2.08% in the previous three trading sessions, 10.81% in the last one month, and 25.00% on YTD basis. The company's stock is trading below its 50-day and 200-day moving averages. Alcatel-Lucent's 200-day moving average of $3.95 is above its 50-day moving average of $3.69. The stock has a Relative Strength Index (RSI) of 32.20. Visit Investor-Edge and access the latest research on ALU at:


Sneak Peek to Corporate Insider Trading  

In the last one month, Alcatel-Lucent has not reported any share transactions by insiders to the U.S. Securities and Exchange Commission (SEC). Complimentary in-depth research on ALU is available at:


About Investor-Edge.com 

At Investor-Edge, we provide our members with a simple and reliable way to leverage our economy of scale. Most investors do not have time to track all publicly traded companies, much less perform an in-depth review and analysis of the complexities contained in each situation. That's where Investor-Edge comes in. We provide a single unified platform for investors' to hear about what matters. Situation alerts, moving events, and upcoming opportunities.




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