Seeking Alpha

In order to secure its financing deal, Alcatel-Lucent (ALU) agreed to provide a rare glimpse...

In order to secure its financing deal, Alcatel-Lucent (ALU) agreed to provide a rare glimpse into the margins of its business units. Some of the numbers aren't pretty: the terrestrial optical unit sports a gross margin of just 17%, and the wireline access unit (e.g. DSL and FTTH gear) a margin of 22%. Alcatel's services GM is also at 22%, well below that of Cisco and other peers. The IP division, which grew 30% Y/Y in Q3, had a healthy GM of 49%. Alcatel also provided detailed market share data on page 13 of its lenders presentation (.pdf).
Comments (8)
  • We know that ALU margins are lower. This is what the turnaround should be based upon - making them higher.
    18 Dec 2012, 06:53 PM Reply Like
  • Hmmm ... Let me guess labor costs and pension liabilities.
    18 Dec 2012, 09:05 PM Reply Like
  • The real problem here, is that many of these "corrections' should have been initiated at least two years ago. Why is this CEO, etc. waiting so long and absorbing additional losses that will never be earned back??
    The top management is derelict in their duties and responsibilities.
    I still believe that a strong, aggressive management team needs to accomplish much stronger day to day management at ALU.
    There are a bunch of stockholders at ALU, throughout the world that are much more deserving than what has developed this past two years.
    Quit screwing around and start paying attention!!!
    ALU is running out of time to get this mess corrected.
    18 Dec 2012, 11:51 PM Reply Like
  • Just wait and see
    ALu future is brighter now
    wait and see, if the French government will come up with different finance option for ALU
    they have till Jan 30th 2013 to do so
    and if they do, this ALU stock will Run higher and will not lookback
    wait and see
    19 Dec 2012, 02:17 AM Reply Like
  • Every1 knows that ALU was on the verge of Bankruptcy, and this note of lows margins is not unheard. With Loan in place, things should improve.
    19 Dec 2012, 03:09 AM Reply Like
  • out of the red & into the blue. ya for alu.
    18 Jan 2013, 04:15 PM Reply Like
  • ALU is to rise now.
    19 Jan 2013, 11:44 PM Reply Like
  • Held since the merger.I hope this is for better days.
    21 Jan 2013, 09:43 PM Reply Like
DJIA (DIA) S&P 500 (SPY)