Alcatel-Lucent slashed its net loss for 2014 by more than 90% to €118 million ($133.5 million) as a result of the vendor's cost-cutting efforts.
The company, which had reported a net loss of €1.3 billion in 2013, also attributed the result to an impairment charge from the prior year.
Revenue fell 3% year-on-year to €13.18 billion, but would have stayed flat excluding the impact of declining managed services income. The decline in managed services revenue was down to the termination or restructuring of loss-making contracts.
By region, revenue from APAC declined 1% year-on-year due to a slowdown in China's networking gear spending. Revenue from North America fell 11% and revenue from Western Europe – excluding managed services revenue – improved 1% over the same period.
The results for the year provide more evidence that Alcatel-Lucent's multi-year Shift Plan is bearing fruit, helping to turn around the lossmaking vendor's fortunes.
“Through the execution of The Shift Plan, we have improved our underlying profitability and free cash flow profile while we have solidified the entire organization,” Alcatel-Lucent CEO Michel Combes commented.
“Entering 2015, we are in a strong position to capitalize on profitable growth opportunities [and our] operational transformation make us confident we will reach our positive free cash flow target in 2015.”
For the fourth quarter, the vendor's net income grew 137% to €271 million, but revenue declined 6% to €3.68 billion. Excluding managed services, revenue fell 3% year-on-year.
Alcatel-Lucent ended the quarter in a cash position of €326 million, compared to a net debt of €132 million at the end of September.