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Wednesday, Jul 31
Alcatel-Lucent/Qualcomm deal reportedly worth €100M+; more deals on tap?
- The FT reports Qualcomm's (QCOM) investment in Alcatel-Lucent (ALU) is worth over €100M ($133M).
- The companies plan to develop products for the burgeoning small cell base station market, where Alcatel has already struck deals with major carriers. Any resulting hardware will almost certainly use Qualcomm's small cell baseband processors.
- Lazard, which argues Qualcomm could profit handsomely from small cell royalties, thinks the market could boost FY14 EPS by $0.08-$0.29.
- Alcatel CEO Michel Combes promises similar R&D-focused deals "with other industry names" in the coming quarters.
- Alcatel made new 52-week highs thanks to the Qualcomm deal and its Q2 beat.
- The IP division (switches/routers) was again an area of strength: sales +21% Y/Y vs. +6% in Q1 and +26% in Q4). Also, platforms (telecom software) sales rose 23% vs. 1.8% in Q1.
- Optics was still soft at -7% Y/Y, but that's better than Q1's -16%. Wireless fell 1% after rising 5% in Q1, as slowing 2G/3G infrastructure sales offset rising 4G sales. Services were a mixed bag.
- Net debt rose by €436M Q/Q to €794M.
- Previous: Alcatel Q2 results/Qualcomm investment