There was evidence that Alcatel-Lucent’s plan to realign itself as an IP specialist was gaining headway after fourth-quarter net profits more than doubled. 

Revenues in 2014 fell three percent to €13.2 billion and although the company made a loss of €118 million, this was down from €1.3 billion 12 months ago.

Margins rose to 33.4 percent in 2014 after a strong final quarter, which saw net income rocket 137 percent to €271 million.

Alcatel-Lucent’s cost-cutting strategy proved to be on target, with the vendor making savings of €30 million in the last three months of 2014.

Annual savings stood at €675 million - more than 70 percent of the Shift Plan objective.

However, Q4 revenues fell six percent.

The vendor’s Access business was the main cause, with sales falling 11 percent to €1.9 billion. Managed services revenue was most significantly hit, down 50 percent to €96 million.

Core Networking saw total revenues rise one percent to €1.8 billion following a 15 percent growth in IP Routing.

Sales were down significantly in the EU and North America in Q4 as well as during the whole of 2014.

Despite revenues falling one percent in Q4, sales in Asia-Pac were up 15 percent throughout the full 12 months.

CEO Michel Combes said he was confident the vendor would meet its positive free cash flow target in 2015.

He commented: “Our fourth quarter and full year 2014 results underline the success of our turnaround. Through the execution of The Shift Plan, we have improved our underlying profitability and free cash flow profile while we have solidified the entire organisation.

“Entering 2015, we are in a strong position to capitalise on profitable growth opportunities and will focus on operational excellence and quality of service.”

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