France's Alcatel-Lucent improves margins in Q2

PARIS, July 31 Thu Jul 31, 2014 1:38am EDT

PARIS, July 31 (Reuters) - Telecom equipment maker Alcatel-Lucent improved its gross and operating margins in the second quarter as an ongoing cost-cut programme and higher sales of new network gear to global operators paid off.

The group also said it planned to float its submarine network division in the first half of next year while keeping a majority stake so as to help the unit develop in the oil and gas services market.

The Paris-based company, which competes with Sweden's Ericsson, China's Huawei and Finland's Nokia , saw second-quarter revenue rise 0.7 percent to 3.28 billion euros compared with the same period a year ago, and core operating profit tripled to 136 million. The operating margin improved to 4.1 percent from 1.3 percent last year, while gross margins climbed to 32.6 percent from 31.2 percent.

The group remained in the red however with a net loss of 298 million euros, compared to 885 million in the same period last year, because of restructuring charges linked to layoffs.

Analysts had expected second-quarter sales of 3.28 billion euros, operating profit of 113 million euros, and a net loss of 19.9 million euros, according to Thomson Reuters I/B/E/S. (Reporting by Leila Abboud;editing by Geert De Clercq)

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