Alcatel-Lucent has posted an unexpected net profit of €25m (£21.8m) for the third quarter ended 30 September after booking a one off gain related to its pension scheme.
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The networking firm has struggled to turn a profit since its inception in December 2006, and posted its first ever net profit at the end of its fiscal 2009.
The Q3 figure compared to a net loss of €182, this time last year. Sales, meanwhile, rose 10.5% year-on-year to €4.07bn.
Alcatel-Lucent said that despite capacity constraints in its supply chain, first highlighted in May, demand for telecoms equipment and related services is recovering due to growth in data traffic, and the need to improve network efficiency.
The growth is largely down to the boom in sales of smartphone and other mobile devices, and represents a potential gold mine for companies like Alcatel-Lucent and its competitors, which are rushing to focus on new network technologies.
Demonstrating the shift in the market, Alcatel-Lucent posted sharp growth in its wireless and IP divisions of 24.25 and 11% respectively.
CEO Ben Verwaayen hailed the "good progress made in our transformation journey".
"Our solutions are recording strong traction with our customers as evidenced by a book to bill ratio up from the year ago period, and a growing share of our next generation product sales."
Added Verwaayen: "Operational excellence and reduced organisational complexity remain our key focus in order to better convert top line momentum into profit and cash flow."