Alcatel-Lucent sales, operating profit dip in Q1

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Apr 24, 20072 mins

Revenue was hit by lower demand for 2G mobile equipment and core networking products

First-quarter operating profit dipped at telecoms equipment maker Alcatel-Lucent on weak sales of the company’s products for wireless and core networks.

Revenue for the first quarter fell 8 percent to €3.9 billion ($5.2 billion as of March 31, the last day in the period reported), with an adjusted operating loss of €260 million, according to preliminary figures from the company. It plans to announce its full financial results for the quarter on May 11.

Alcatel and Lucent Technologies merged last year in a move to fend of growing competition from Asian manufacturers, particularly China’s Huawei Technologies Co., as well as newly merged Nokia Siemens Networks and Telefonaktiebolaget LM Ericsson.

First-quarter revenue was hit in part by lower demand for 2G (second-generation) mobile network equipment in emerging markets, Alcatel-Lucent said. Demand for the company’s core networking products, such as switches, routers, and transmission systems, was also down.

But the French-U.S. manufacturer said it expects sales to rebound, after signing deals for new broadband mobile technologies such as HSPA (High Speed Packet Access) and a 3G (third-generation) network contract in China.

The company also expects to post a capital gain of €780 million in the first quarter after completing the sale of satellite and other assets to Thales SA.