CEO Serge Tchuruk forecast low to mid-single-digit revenue growth for both the second quarter and the full year with a double-digit growth in earnings per share for the year.
Like its rivals facing an uncertain operating environment, Alcatel is looking for ways to secure predictable future revenue. Tchuruk is believed to favor close cooperation with defense group Thales, in which it hold a 9.5% stake, as a way of increasing its satellite ventures.
With 42% of revenue coming from Western Europe, Alcatel is desperate to break into new markets. Its first-quarter performance was hit by the costs of establishing itself in emerging markets. Though its mobile communications business showed a 27.9% increase in revenue to 789m euros ($1bn) helped by contracts in China, Russia, India, and Brazil, operating profit fell 17.5% to 66m euros ($85.1m).
In the fixed-line business where revenue fell 9% in the quarter to 987m euros ($1.29bn), Thuruk predicts a rebound in the second half, which will follow a second quarter that he expects to be weak. His optimism is based on a belief that triple-play products where the company claims market leadership will generate revenue that will more than offset traditional wireline business.
In private communications, Alcatel had a flat quarter with revenue at 848m euros ($1bn), with a low uptake of voice services, though IP voice represented a third of enterprise shipments.
