(Associated Press via NewsEdge) French telecom equipment maker Alcatel, which is buying US rival Lucent Technologies, registered a 42% drop in third-quarter profit, blaming falling sales and profitability of its mobile network equipment.
Alcatel said net profit came to $195 million or 14 US cents per share in July-September, compared with $334.15 million, or 24 US cents per share, in the year-earlier period. Revenue rose 1.4% to $4.19 billion from $4.13 billion.
Alcatel shares jumped 5.2% to $12.68 in Paris trading despite disappointment with the company's mobile performance. Some analysts credited better-than-expected results from Lucent's wireless CDMA business, announced simultaneously in New Jersey.
Profitability at Alcatel's largest division, fixed communications, was lifted by strong demand for industrial gear offering IP-based television and phone services as well as Web access through a single household connection. Operating profit at the division rose 25% to $190 million on almost flat revenue of $1.71 billion.
But the mobile division's weak figures 'partially erased' the fixed-line performance, chairman and chief executive Serge Tchuruk said.
Slow uptake of much-trumpeted 3G phone services such as video downloads and live streaming has been compounded by a slump in demand for older second-generation equipment, as coverage approaches saturation even in many emerging markets.
Mobile equipment sales fell 8.9% to $1.25 billion, and operating profit plunged 45% to $80 million. The division's operating margin fell to 6.4% from 10.6%.
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