Alcatel Lucent SA (ADR) (NYSE:ALU) registered yet another loss reported over the quarterly period.
Despite the fact that the telecommunications equipment manufacturer reported increased gross margins in the first quarter performance, the company was unable to avoid losses. This was mostly influenced by the sluggish spending by major telecommunication companies in the United States. More to that, the dollar has recently been very competitive and strong against other currencies thus leading to low performance reports.
On Thursday, the company reported that it made a net loss of EUR 73 million. This translates to a loss of 3 cents per share. In the previous year, the company had reported a loss of EUR 73 million or an equivalent of 3 cents per share. That is pretty much an almost constant value loss.
On to some encouraging news, the company experienced a doubled adjusted operating income to about EUR 88 million. In the previous year, it had recorded an adjusted operating income at EUR 33 million. The company thus reported an improved gross margin, rising from 32.3% in the previous year to 34.6%. The boost was mostly a result of increased software sales that overshadowed the hardware department. Cost cutting measures also played a significant role.
Unfortunately, Alcatel Lucent has been spending too much in the first quarter, leading to a cash flow loss amounting to EUR332 million. In the previous year, the company lost EUR398 in free cash flow. Regardless of the negative reports, the company’s CEO, Michel Combes announced that the company expects 2015 to mark its first year with progressive free cash flow.
During a press briefing, Combes reported that the company has been able to improve its margin especially in difficult surroundings particularly those characterized by slow spending such as North America. These results, however, do not fully represent the difficulties and advantages that Nokia Corporation (ADR) (NYSE:NOK) could encounter if it buys into Alcatel Lucent.
Nokia itself has been on rough grounds as far as cost cutting is concerned. However, the company stands to reap lots of benefits from Alcatel Lucent in its plan to venture deeper into the American market.
