Alcatel 3Q06 results

Alcatel announced a 42% drop in 3Q06 earnings to €155, on revenues slightly up 1.4% to €3.3bn. Despite disappointment with results, Alcatel shares jumped 5%+ to above €10 in Paris trading. Weak results were driven by poor results in mobile business, both in 2G and 3G businesses. Mobile revenues fell 9% to €1bn, while the operating profit dropped 45% to €64m. The acquisition of Nortel 3G business is expected to boost mobile revenues next year. Fixed comm division reported revenues up 6% to €1.3bn and a 25% rise in operating income to €151m. IP network transformation, IP routing, ADSL, and access business drove the good performance. Private unit posted € 1bn in revenues (+8%) with an operating income of €50m, down 22%. Geographical breakdown of revenues gives 37% in Europe, 16% in NA, 18% in APAC and 29% in ROW.