Fourth-quarter revenue dropped 16 percent year-on-year on a comparable basis, to ?4.42 billion (US$5.83 billion as of Dec. 31, the last day of the period reported) from ?5.25 billion, while revenue for the full year fell to ?18.25 billion from ?18.57 billion. Although the merger was only completed at the end of November, the company provided pro-forma figures as if the merger had taken place on Jan. 1, and restated earlier figures on a comparable basis.
On that basis, the company made a net loss of ?618 million in the fourth quarter, compared to a net profit of ?381 million a year earlier. For the full year, net profit fell to ?522 million, down from ?1.67 billion on a comparable basis the previous year.
The disappointing performance was due to uncertainty among customers and staff about the outcome of the merger, and to a highly competitive market in North America during the fourth quarter, the company said.
Post-merger, the company makes around three-quarters of its revenue from carrier products. Revenue of ?1.47 billion came from fixed-line telecommunications equipment in the fourth quarter, ?1.24 billion from wireless equipment, and ?510 million from converged products. Enterprise networking equipment accounted for ?410 million, and services for ?740 million. Demand was particularly strong for enterprise IP telephony equipment in Europe, the company said.
As it proceeds with the integration of Alcatel and Lucent, the company expects to realize cost savings of ?600 million this year, and a total of ?1.7 billion in cost savings within three years of the merger. The savings will come from optimization of its supply chain, and the elimination of duplicate resources and products, and around 12,500 jobs.
