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Home » Alcatel-Lucent (ALU) CEO Michel Combes on Q2 2014 Results – Earnings Call Transcript

Alcatel-Lucent (ALU) CEO Michel Combes on Q2 2014 Results – Earnings Call Transcript

Source: Seeking Alpha

 

Alcatel-Lucent SA (NYSE:ALU)

Q2 2014 Results Earnings Conference Call

July 31, 2014; 07:00 a.m. ET

Executives

Michel Combes – Chief Executive Officer

Jean Raby – Chief Financial Officer

Analysts

Ehud Gelblum – Citigroup

Gareth Jenkins – UBS

Achal Sultania – Credit Suisse

Alexander Peterc – Exane BNP Paribas

Sandeep Deshpande – JPMorgan

Francois Meunier – Morgan Stanley

Stuart Jeffrey – Nomura

Operator

Welcome to the Alcatel Lucent press and analyst conference. We leave the floor to Michel Combes.

Michel Combes – Chief Executive Officer

Okay. Good morning and good afternoon to everyone. Thank you for joining us on the call to discuss Alcatel Lucent’s Q2 and H1, 2014 results. As usual, I will start by presenting an overview of our results and our activity before handing over to Jean Raby for a detailed financial review.

Let me start with some introductory remarks on the key developments we observed during Q2 and the first half of the year. First, from a near term market standpoint, we saw operators intensifying their focus on wireless access, pushed by LTE deployments. We perceived this on a broad base, although with somewhat more vigor in North America and in China.

This movement has clearly favored our access segment, notably our wireless access business, which recorded both year-on-year and quarter-on-quarter growth in the neighborhood of 30% in Q2. Such an increase was fueled by coverage and capacity projects.

More specifically in LTE and Small Cells, the two areas where we decided to place our bets, our revenues more than doubled over the first half, while almost tripling in Q2 alone. Meanwhile, demand for high broadband access also led our fixed business to enjoy a solid quarter in revenues and in profitability.

On the other hand, revenue performance in core networking was a bit more mixed. IP routing was down 7% on a very high conversion basis, which I had flagged on various occasions. I will repeat what I say every quarter, namely that one should not over read a single quarter performance, given the viability we may and have already experienced.

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