Alcatel-Lucent back in the black first time after 2006 merger

Telecom gear-maker Alcatel-Lucent declared a net profit of euro 1.1 billion, the first time since the trans-Atlantic merger between the two companies in 2006. Last year, the company had reported a net loss of euro 334 million.

The telecom major has been on a cost-cutting drive ever since the merger. It plans to cut costs further this year.

''Overall, this concludes a second year of strong improvement in our results, and leads to the first positive full-year net results for Alcatel-Lucent since the merger,'' declared CEO Ben Verwaayen.

The company supplies equipment to telecom firms, including AT&T, Verizon and France Telecom. Ever since the merger in 2006, it has piled up losses of over euro nine billion.

Total sales in 2011 was down 2.1 per cent to euro 15.3 billion; sales in the fourth quarter were down by almost 13 per cent.

But the company plans to earn hundreds of millions of euros this year following the adoption of a licensing strategy relating to its patents. Alcatel-Lucent has nearly 30,000 patent rights, on a wide range of products and services ranging from fixed and mobile communications to semiconductors and consumer electronics. It now plans to offer these patents on a syndication basis. Alcatel-Lucent has also signed a deal with RPX Corp, a patent licensing specialist, enabling it to generate revenues from its patent portfolio. RPX will market its patents to companies, including Google and Intel.

Analysts expect the company to generate nearly a billion euros in 2012 through syndication of its patents. Rivals, including Ericsson AB, have also started offering their patents to clients in a bid to boost revenues. Other companies are also adopting a similar strategy of licensing their patents or brands. Eastman Kodak Co, which filed for bankruptcy last month, plans to license its brand to other camera-makers.

Acatel's patent portfolio includes voice recognition and video-conferencing technologies, which it does not plan to sell. ''By syndicating the patent portfolio, we found a creative way to extract value without weakening ownership,'' says Verwaayen.
However, the CEO who took over in 2008 has been disposing of assets. After selling a stake in Thales, an aerospace manufacturer, it recently sold Genesys, a call centre software unit, to Permira Advisers LLP for $1.5 billion.