Profit the key for Alcatel-Lucent's Verwaayen

New Alcatel-Lucent chief executive content with Q3 revenue but claims action is needed to improve bottom line

Alcatel-Lucent's new chief executive Ben Verwaayen has targeted further improvements to the communications vendor’s profitability after its third quarter losses narrowed significantly.

Revenue for the three months to the end of September was down 6.6 per cent on the same period last year and stood at €4.065bn (£3.2bn). Net loss was €40m, down from a €345m in Q3 2007 when the company was impacted by hefty restructuring charges.

Former BT top dog Ben Verwaayen joined the communications vendor as chief executive last month, replacing embattled predecessor and former Lucent Technologies head Patricia Russo. Verwaayen claimed his company had a solid cash base and had defied a tough economic environment to meet its revenue guidance this quarter.

"(This quarter) we continued to grow our Enterprise business at a healthy rate and saw accelerated growth in Services," he said.

"Having said that, our profitability remains unsatisfactory. The gross margin came in at the lower end of our expectations in the third quarter, reflecting an adverse shift in both our product and geographic mixes. In the carrier space, this was coupled to a declining top-line and led to an adjusted operating loss which calls for a set of actions that I will be describing over the coming period."