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Siemens, Alcatel financial results reinforce wireless vendor upswing

Siemens AG and Alcatel Corp reinforced a season of good feeling among wireless vendors as they swung to profitable quarters.

“These trends show that improvement in the broader macroeconomic environment is now arriving in our industry, and that we are succeeding with our enterprise-wide initiative, Go for profit and growth,” remarked Siemens Chief Executive Officer Heinrich von Pierer.

The German vendor had a net profit of $983.5 million, a 29-percent jump from the third quarter of last year when it had a net profit of $762.7 million. Basic and diluted earnings per share amounted to $109 and $106 respectively compared with $86 the same period last year.

Orders rose 11 percent to $22 billion compared with $20.7 billion in the year-ago period. Sales moved up 5 percent to $21.9 billion as against $20.8 billion in the year-ago period.

In its mobile business, overall sales jumped 13 percent to $2.9 billion, with a 23-percent growth in orders. The mobile division earned $72 million.

In its mobile handset division, the company posted a loss of $50 million, owing to what it described as a decline in the average selling price of its products. The price decline accounted to a loss of $106 million. The division had sales of $1.2 billion on a volume of 10.4 million handsets, compared with $1.12 million a year ago on 8.1 million units of handsets.

In its networks unit, the company earned $160.4 million on sales of $1.42 billion, compared with $43.4 million on sales of $1.16 billion in the year-ago period.

French supplier Alcatel had a net profit of $28 million compared with a loss of $813 million in the year-ago period. Earnings per share were 10 cents, although after goodwill it will amount to a loss of 4 cents. Sales rose year-over-year by 3.7 percent to $3.7 billion as against the same period last year of $3.5 billion.

The company said its gross margin was 38.3 percent of sales compared with 31.8 percent in the same period last year.

In its mobile division, the company enjoyed a slight revenue rise to $1.01 billion from the year-ago period when it had $1 billion, attributing the increase to “the transitioning to a new product in wireless transmission and some slippage in revenue recognition in mobile networks.”

Alcatel said income from operations amounted to $58 million compared with $12 million a year ago.

“Mobile Networks made a significant contribution, with its significant double-digit margins maintained,” said Alcatel.

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