Alcatel-Lucent Makes Analysts Look Bad

Seth Jayson, The Motley Fool
Updated

Alcatel-Lucent (NYS: ALU) reported earnings on April 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Alcatel-Lucent missed estimates on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly and GAAP earnings per share improved. The non-GAAP profit was a surprise, as analysts had predicted a loss.


Gross margins dropped, operating margins dropped, and net margins improved.

Revenue details
Alcatel-Lucent reported revenue of $4.27 billion. The 15 analysts polled by S&P Capital IQ anticipated sales of $4.47 billion on the same basis. GAAP reported sales were 19% lower than the prior-year quarter's $5.30 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.21. The five earnings estimates compiled by S&P Capital IQ anticipated -$0.01 per share. GAAP EPS were $0.24 for Q1 versus -$0.01 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 30.3%, 590 basis points worse than the prior-year quarter. Operating margin was -9.0%, 750 basis points worse than the prior-year quarter. Net margin was 12.4%, 1,270 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $5.00 billion. On the bottom line, the average EPS estimate is $0.03.

Next year's average estimate for revenue is $19.99 billion. The average EPS estimate is $0.06.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 676 members out of 839 rating the stock outperform, and 163 members rating it underperform. Among 120 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 87 give Alcatel-Lucent a green thumbs-up, and 33 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Alcatel-Lucent is hold, with an average price target of $2.71.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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