Orlando, FL 4/26/12 (StreetBeat) -- Alcatel-Lucent (NYSE: ALU) shares are trading sharply lower following the company’s Q1 financial report.For the quarter, Alcatel posted revenue of 3.2 billion Euros, down 12.3% from a year ago, or 14.8% lower on a constant currency basis. Revenues were shy of the Street consensus at 3.35 billion Euros. In dollars, revenues were $4.23 billion, while the Street had expected $4.6 billion.
The telecom equipment company reported an adjusted operating loss for the quater of $221 million; free cash flow was -$163 million. Net income was 440 million Euros.
One obvious issue with the quarter was that gross margin fell to 30.3%, down from 35.3% a year ago and 34.4% in the fourth quarter.
“Today’s results reflect a slow start to the year while demonstrating good control on both cash and costs and a strong momentum in our next generation products portfolio,” CEO Ben Verwaayen said in a statement. “But gross margin is not at the level we would have liked. Since the last quarter of 2011, we have been negatively impacted by lower volume and by an unfavorable revenue mix, particularly in services”.
He also noted that “market uncertainties remain high in Europe and the transition from CDMA to LTE is accelerating in North America.”
The company is not changing full year guidance. “We expect to have better visibility on our profitability at the end of the current quarter,” Verwaayen said.
ALU is down 29 cents, or 14.9%, to $1.66.
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