Alcatel-Lucent is back in the black

The executives of Alcatel-Lucent can finally breathe a sigh of relief with the recent 3Q2010 announcement. The company, according to CEO Ben Verwaayen speaking to the NYT, has reached “a significant turning point” in its business operations.

For the third quarter its net income was 25 million euros. Okay, so they missed analyst targets. But these guys have lost so much money and traction throughout the years that they deserve a third quarter celebration. Not to mention new deals with China Mobile, China Telecom, and China Unicom, and Verizon Wireless here in the States.

Its enterprise and Genesys sales enjoyed a rebound:

The recovery in our Enterprise applications business continued in the third quarter, with revenues of Euro 299 million increasing 7.2% over the year-ago quarter. After falling in the first half, voice telephony revenues increased at a low single-digit rate, reflecting gains in the medium-large enterprise segment, while growth in both data networking and Genesys, our contact center software business, picked up from their first half rates.

Unfortunately, Anders Bylund of The Motley Fool doesn’t share the optimism, going so far as to compare ALU to Nortel:

The company is sitting on a precarious balance of cash and debt and keeps burning money quarter by quarter. With an Altman Z score that previously stood at 0.04 before these tepid earnings, Alcatel-Lucent continues to face the looming threat of bankruptcy if it can’t figure out a way to change direction in the coming quarters and years. The stock may look cheap at first glance, but you get what you pay for. This looks like the next Nortel implosion waiting to happen.

Now that’s got to hurt.


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