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 for 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.
Siemens also announced an organizational change. It set up a new business in
the United States called Siemens Communications, which will combine wireless and
wireline infrastructure, devices and Internet Protocol convergence
applications.
The new business’s CEO and president will be Andy Mattes, who
has been leading the vendor’s U.S. networking activity.
“We have created
Siemens Communications to address the revolution in communications brought about
by the explosion of mobile communications devices and solutions and the exciting
possibilities of IP converged solutions,” said Mattes.
This is the
biggest U.S. announcement by Siemens since it joined the New York Stock Exchange
a few years back to underline the value of its business in the
country.
“The U.S. market is particularly compelling for Siemens
Communications because our technology is giving customers-from teenage
cell-phone users to CIOs of large corporations-some of the most innovative
communications tools and solutions in the world,” said Mattes.
The
organizational merger, which will be completed in October, will serve as the
largest installed base of wireless and wireline carrier and enterprise customers
in the world, serving U.S. operators in an end-to-end fashion, according to the
company.
French supplier Alcatel last week reported 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 the figure amounted 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 vendor embarked on some cost
cutting and sold units it considered unprofitable, including optical fiber and
batteries. Alcatel also announced partnerships that analysts see as moves to
exit the mobile handset arena and focus on infrastructure and its IP
offerings.
“We are gaining momentum in our business through convergence
solutions from fixed to mobile and from carrier to enterprise,” said Serge
Tchuruk, chairman and CEO of Alcatel. “In addition, our video expertise
positions us well for the increasing call for bids from customers both in Europe
as well as in North America, in both triple-play markets in fixed networks and
multimedia applications in mobile networks.”
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.”
Contract wins in emerging markets in the Indian sub-continent, Africa and
Latin America, according to the company, compensated for “a certain
slackening in Southeast Asia.”
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.
