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Alcatel Lucent shares jump on profit outlook | Alcatel Lucent shares jump on profit outlook |
(about 3 hours later) | |
Shares in telecoms equipment maker Alcatel Lucent have jumped 20% after it reported an annual profit and said it was targeting better profit margins. | Shares in telecoms equipment maker Alcatel Lucent have jumped 20% after it reported an annual profit and said it was targeting better profit margins. |
The firm posted a 1bn euro ($1.3bn; £840m) profit for 2011, compared with a 334m euro loss in 2010. | The firm posted a 1bn euro ($1.3bn; £840m) profit for 2011, compared with a 334m euro loss in 2010. |
Profits for the last three months of 2011 rose to 868m euros, up from 340m euro profit in 2010. | Profits for the last three months of 2011 rose to 868m euros, up from 340m euro profit in 2010. |
The company also said it was targeting 500m euros of cost savings in the coming year. | The company also said it was targeting 500m euros of cost savings in the coming year. |
"We target, in 2012, additional savings of 200m euros in fixed costs and 300m euros in variable costs," said chief executive Ben Verwaayen. | "We target, in 2012, additional savings of 200m euros in fixed costs and 300m euros in variable costs," said chief executive Ben Verwaayen. |
"Overall, this concludes a second year of strong improvement in our results, and leads to the first positive full year net results for Alcatel Lucent since the merger," he added. | "Overall, this concludes a second year of strong improvement in our results, and leads to the first positive full year net results for Alcatel Lucent since the merger," he added. |
Alcatel merged with US-based Lucent in 2006. | Alcatel merged with US-based Lucent in 2006. |
"Although visibility remains limited, our aim for 2012 is to achieve an adjusted operating margin higher than the level reached in 2011, and reach a strong positive net cash position at the end of 2012," Mr Verwaayen said. | "Although visibility remains limited, our aim for 2012 is to achieve an adjusted operating margin higher than the level reached in 2011, and reach a strong positive net cash position at the end of 2012," Mr Verwaayen said. |
In November 2011, the firm issued a profit warning and committed itself to a 521m euro cost-cutting programme. | In November 2011, the firm issued a profit warning and committed itself to a 521m euro cost-cutting programme. |
Although the firm has been targeting growing demand for mobile broadband by supplying network equipment to support it, revenues at its wireless division fell 22% in the three months to the end of December 2011 compared to the same period in 2010. | Although the firm has been targeting growing demand for mobile broadband by supplying network equipment to support it, revenues at its wireless division fell 22% in the three months to the end of December 2011 compared to the same period in 2010. |
Alcatel Lucent said it was affected by a drop in demand in its American markets as customers reined in orders towards the end of the year. | Alcatel Lucent said it was affected by a drop in demand in its American markets as customers reined in orders towards the end of the year. |
Akshay Sharma at research group Gartner said: "2012 will be challenging with increased competitive pressures from Huawei, Ericsson, and Nokia Siemens Networks." |
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