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Alcatel cuts net losses but expects sales to stay flat

Alcatel reduced its net loss in the second quarter by 54% year on year as group sales declined 33% on a comparable basis.

The Paris telecommunication equipment manufacturer made a net loss for the quarter of €1.44bn (£910m) as of 30 June, the end of the period being reported), compared with a loss of €3.12bn (£1.97bn) for the same period a year ago.

Group sales declined to €4.24bn (£2.68bn). Last year, group sales stood at €6.77bn (£4.27bn), or €6.36bn (£4.02bn) restated to reflect changes in the company's structure, including the sale of its digital subscriber line modem business in December, its European enterprise and services business in April, and its microelectronics business last month.

The company did succeed in reducing its net debt. At the end of the second quarter, net debt stood at €1.3bn (£820m), down by €4bn (£2.53bn) from a year ago.

The outlook for the year is uninspiring. Alcatel sees no market recovery in sight, with sales expected to stay flat for the rest of the year. However, it expects income from operations to improve during the period.

Alcatel is continuing to invest in research and development, concentrating on enhancing the intelligence of optical, cellular and enterprise networks.

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