FORM 6-K
FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of October, 2006
Commission File Number 1-11130
ALCATEL
(Translation of registrants name into English)
54, rue La Boétie
75008 Paris France
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form
20-F or Form 40-F.
Form 20-F þ Form 40-F o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b) (1): o
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b) (7): o
Indicate by check mark whether by furnishing the information contained in this Form, the registrant
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.
Yes o No þ
If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b): 82-
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
Alcatel |
|
|
|
|
|
|
|
|
|
Date: October 24, 2006
|
|
By:
|
|
/S/ Jean-Pascal Beaufret
Jean-Pascal Beaufret
|
|
|
|
|
|
|
Chief Financial Officer |
|
|
This report on Form 6-K is incorporated by reference into Registration Statement No 333-133919
filed with the Securities and Exchange Commission.
Press release
Alcatel reports third quarter 2006 results
Third quarter financial highlights:
|
|
|
Revenues up 1.4% yoy at Euro 3,335 million |
|
|
|
|
Operating profit* at Euro 258 million, a 7.7% operating margin |
|
|
|
|
Net income (group share) at Euro 155 million, EPS at Euro 0.11 |
|
|
|
|
Net cash position at Euro 722 million |
Paris, October 24, 2006 Alcatels (Paris: CGEP.PA and NYSE: ALA) Board of Directors reviewed and
approved third quarter 2006 results. Revenues were up by 1.4% at Euro 3,335 million compared with
Euro 3,289 million (up 2.7% at constant Euro/USD exchange rate) in the same period last year. The
gross margin was 33.6%. Operating profit* amounted to Euro 258 million, a 7.7% operating margin.
Net income (group share) for the quarter was registered at Euro 155 million or a diluted EPS of
Euro 0.11 per share (USD 0.14 per ADS), (Euro 0.10 per share, excluding capital gains) which
compared with a diluted EPS in third quarter 2005 of Euro 0.19 (Euro 0.12 per share, excluding
capital gains).
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Figures |
|
Third Qtr |
|
Third Qtr |
|
Second Qtr |
In Euro million except for EPS |
|
2006 |
|
2005 |
|
2006 |
Profit & Loss |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
3,335 |
|
|
|
3,289 |
|
|
|
3,384 |
|
Operating Profit* |
|
|
258 |
|
|
|
278 |
|
|
|
263 |
|
Income from operating activities |
|
|
237 |
|
|
|
392 |
|
|
|
243 |
|
Net income (group share) |
|
|
155 |
|
|
|
266 |
|
|
|
180 |
|
EPS Diluted (in Euro) |
|
|
0.11 |
|
|
|
0.19 |
|
|
|
0.13 |
|
EPS Diluted (in Euro) excluding capital gains |
|
|
0.10 |
|
|
|
0.12 |
|
|
|
0.12 |
|
E/ADS (in USD)** |
|
|
0.14 |
|
|
|
0.24 |
|
|
|
0.17 |
|
Number of shares (billion) |
|
|
1.38 |
|
|
|
1.38 |
|
|
|
1.38 |
|
|
|
|
* |
|
Income (loss) from operating activities before restructuring, share-based payments and gain
(loss) on disposal of consolidated entities, as disclosed in the consolidated financial statements,
is herein referred to as Operating profit
|
|
** |
|
E/ADS has been calculated using the US Federal Reserve Bank of New York noon euro/dollar buying
rate of USD1.27 as of September 29, 2006. |
Serge Tchuruk, Chairman and CEO, summarized the Boards observations:
The third quarter once again confirmed Alcatels leading position in the transformation
of networks toward a high bandwidth, full IP architecture providing enhanced triple play services
to end users and reducing operating costs for the carriers.
In the wireline sector, this translated into increasing traction for our IP, access, optical and
applications solutions in the carrier and enterprise markets where Alcatels revenues (excluding
the seasonal submarine activity) grew by over 10%. The strong inroads of
1
Alcatel in the IP routing
market were again highlighted by a near doubling of revenues over the same period last year.
Likewise, terrestrial optics as well as enterprise
applications revenues grew by over 20% and 30% respectively, with Alcatels product portfolio
clearly outpacing competition.
This strong performance was partially offset by a decline in our wireless revenues, whose
annualized growth had averaged 25% in eight successive quarters, and where the evolution toward IP
technologies and new video services is still at an early stage. In the emerging countries where
the number of 2G greenfield deployment projects is diminishing, we maintained our selective
commercial policy, deliberately abstaining from large contracts where risks are high in the medium
term. Furthermore, while most customers have indicated their strong support for our strategic
moves with Lucent and Nortel, the materialization of our currently active 3G projects will only
occur once these transactions are closed. We are continuing our strong focus on investment in next
generation technologies such as NGN, IMS, and WiMAX to secure a leading position in future network
builds.
We continue to make good progress toward our pending merger with Lucent Technologies and believe we
will complete a successful closing before the end of the year. Both the Thales transaction and our
acquisition of Nortels UMTS radio access business are also on track and we maintain our objective
of nearly simultaneous closings before year end. While these strategic moves are currently putting
pressure on Alcatels organization as well as additional costs in our P&L, we are today more than
ever convinced that they will generate value for the company. Our objective will not only be to
hold the number one position in wireline, but also to be one of the very few strategic suppliers to
Tier 1 wireless players, making us the key player for the fixed, mobile, and enterprise
convergence.
As stated last quarter, the structure of the company will significantly change in the coming
quarter, therefore we will not be providing company specific guidance at this time.
* * *
* * * *
Third Quarter Business Update:
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Breakdown |
|
Third Qtr |
|
Third Qtr |
|
Second Qtr |
In Euro million |
|
2006 |
|
2005 |
|
2006 |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Communications |
|
|
1,363 |
|
|
|
1,282 |
|
|
|
1,363 |
|
Mobile Communications |
|
|
994 |
|
|
|
1,092 |
|
|
|
1,007 |
|
Private Communications |
|
|
1,001 |
|
|
|
928 |
|
|
|
1,034 |
|
Other & Eliminations |
|
|
(23 |
) |
|
|
(13 |
) |
|
|
(20 |
) |
Total |
|
|
3,335 |
|
|
|
3,289 |
|
|
|
3,384 |
|
Income from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
Fixed Communications |
|
|
151 |
|
|
|
121 |
|
|
|
133 |
|
Mobile Communications |
|
|
64 |
|
|
|
116 |
|
|
|
80 |
|
Private Communications |
|
|
50 |
|
|
|
64 |
|
|
|
51 |
|
Other & Eliminations |
|
|
(7 |
) |
|
|
(23 |
) |
|
|
(1 |
) |
Total |
|
|
258 |
|
|
|
278 |
|
|
|
263 |
|
2
Note: The following comments are based on year on year comparisons.
Fixed communications
Third quarter revenue increased by 6.3% to Euro 1,363 million compared with Euro 1,282 million in
the same period last year. The IP network transformation continued to drive revenues and a strong
performance was registered in the access, IP carrier data, and the terrestrial optical businesses.
The positive momentum in triple play continued to significantly influence customers investment
decisions, highlighted by new wins in Western Europe during the quarter. The access business
registered strong performance with 5.8 million lines delivered with significant growth in the IP
based DSLAM product line. A historical landmark was reached with more than 100 million DSL
cumulative lines delivered and with more than 100 customers for the high end IP based DSLAM
product. The IP routing activity continued its excellent growth, almost doubling revenues
year-over-year, with continued diversification into mobile carriers and emerging markets and new
wins announced in Asia and Western Europe. The MS WAN business softened as these networks
continued transitioning to Ethernet, but strong performance in ATM-based 3G RAN (Radio Access
Network) aggregation, especially with North American mobile carriers, continued to partially offset
this decline. The DWDM terrestrial optical business registered a significant increase in revenues
due to sustained demand in the metro and long haul sectors driven by bandwidth expansion to support
video services. This performance was slightly offset by a decline in submarine revenues against a
strong performance last year. Nevertheless, the order pipeline has significantly improved for
2007. The positive momentum continued in the NGN/IMS activity, with a rapidly growing installed
base in China and Western Europe. The traditional TDM voice activity continued to decline as
expected during the quarter, however, some of this decrease continues to be offset by
maintenance/services revenue, which now accounts for a significant portion of the business.
Operating profit amounted to Euro 151 million, representing an 11.1% operating margin with
significant contributions coming from the access, IP data and optical businesses.
Mobile communications
Third quarter revenue decreased by 9.0% to Euro 994 million compared with Euro 1,092 million in
the same period last year. Revenues slightly declined in the 2G mobile radio business reflecting
Alcatels commercial selectivity in an aggressive pricing environment. The Chinese market
continued to register good growth, even following a strong first half, to meet continued net
subscriber growth. In terms of 3G activity which has softened, Alcatels acquisition of Nortels
UMTS radio access activity is expected to result in the materialization of additional business once
the transaction is finalized. Trials continued in HSDPA and plans for a commercial launch are well
under way. Momentum is building for WiMAX adoption, with a total of fifteen customers todate. The
network migration to the NGN/IMS technologies continued to significantly reduce traditional circuit
TDM revenues. The take up of NGN/IMS solutions is promising and is positively impacting the mobile
solutions business. Alcatel now has the largest worldwide installed base with NGN wireless core
technology with more than 60 million lines currently installed, including a commercial UMA launch
in North America and significant shipments to China. Strong positioning in real time payment is
having a positive impact on revenues with the convergent prepaid
3
and postpaid payment solutions now
deployed with a growing number of customers around the world. Positive user experience on
Alcatels video solutions resulted in market recognition.
Operating profit amounted to Euro 64 million, representing a 6.4% operating margin, reflecting, in
part, continuing investments in the NGN/IMS core, 3G, Mobile TV and WiMAX product offering as well
as a competitive pricing environment.
Private communications
Third quarter revenue increased by 7.9% to Euro 1,001 million compared with Euro 928 million in
the same period last year. Revenue performance was satisfactory across all business divisions with
a strong performance in the enterprise and in the rail communication businesses and with good
revenues also registered in the satellite business. The enterprise business turned in a solid
performance across all product lines, with a strong applications revenue registered. The contact
center activity, Genesys, continued to perform very well, in particular in the voice portal
business following the two recent acquisitions. The IP telephony activities continued to benefit
from a balanced customer mix in small, medium and large businesses. The rail communications grew
its revenue as a result of good execution of all contracts, especially the successful opening of a
high speed line in Finland and the commissioning of an electronic interlocking system in Germany
for the subway segment. New contracts were signed during the quarter, in particular in China for
both metro and a new high speed line. The integration and services business registered a soft
quarter reflecting less opportunity in the Transport Segment. The space activity grew during the
quarter and registered three major new commercial wins in Western Europe.
Operating profit amounted to Euro 50 million, representing a 5.0% operating margin, with a
satisfactory performance coming from all businesses.
Alcatel will host an audio web cast at 4:00 p.m. Paris time (3:00 p.m. London and 10:00 a.m.
New York), which can be accessed at http://www.alcatel.com/3q2006/ or
http://www.alcatel.fr/3q2006.
Third Quarter 2006 results
Consolidated Income Statement:
|
Ø |
|
Revenues: Euro 3,335 million vs. Euro 3,289 million Q3 05
(up 1.4%) and vs. Euro 3,384 million sequentially |
|
|
Ø |
|
Geographical distribution of revenues: |
|
|
|
|
|
|
|
|
|
W. Europe:
|
|
|
37 |
% |
|
|
North America:
|
|
|
16 |
% |
|
|
Asia:
|
|
|
18 |
% |
|
|
RoW:
|
|
|
29 |
% |
|
Ø |
|
Gross margin: 33.6% (34.6% for Q3 05) |
|
|
Ø |
|
Selling, general and administration (SG&A) costs: Euro (505) million (15.1% of sales) |
|
|
Ø |
|
Research and development (R&D) expenses: Euro (357) million (10.7% of sales) |
|
|
Ø |
|
Operating profit: Euro 258 million, an 7.7% operating margin |
|
|
Ø |
|
Income from operating activities: Euro 237 million and included |
|
o |
|
Share-based payment at Euro (17) million |
|
|
o |
|
Restructuring costs at Euro (19) million |
|
|
o |
|
Gain/(loss) on disposal of consolidated entities at Euro 15 million |
|
Ø |
|
Income (loss) before tax and discontinued operations: Euro 179 million and included : |
|
o |
|
Net financial costs of Euro (64) million
|
4
|
o |
|
Share of equity affiliates at Euro 6 million |
|
Ø |
|
Income (loss) from continuing operations: Euro 166 million and included: |
|
o |
|
Income tax expense of Euro (13) million |
|
Ø |
|
Net Income (Group share): Euro 155 million |
|
|
Ø |
|
Diluted EPS: Euro 0.11 (USD 0.14 per ADS) based on an average of 1.38 billion shares |
BALANCE SHEET ITEMS:
|
Ø |
|
Operating working capital: Euro 1,208 million, 8.7% of last 12 months revenues |
|
|
Ø |
|
Cash and equivalents and marketable securities: Euro 4,143 million |
|
|
Ø |
|
Net Cash: Euro 722 million |
Upcoming Events/Announcements
|
|
|
February 2007
|
|
Fourth quarter and full year 2006 Earnings Announcement |
April 2007
|
|
First quarter 2007 Earnings Announcement |
5
About Alcatel
Alcatel provides communications solutions to telecommunication carriers, Internet service providers
and enterprises for delivery of voice, data and video applications to their customers or employees.
Alcatel brings its leading position in fixed and mobile broadband networks, applications and
services, to help its partners and customers build a user-centric broadband world. With sales of
EURO 13.1 billion and 58,000 employees in 2005, Alcatel operates in more than 130 countries. For
more information, visit Alcatel on the Internet: http://www.alcatel.com
|
|
|
|
|
Alcatel Press Contacts |
|
|
|
|
Régine Coqueran
|
|
Tel : + 33 (0)1 40 76 49 24
|
|
regine.coqueran@alcatel.com |
Stéphane Lapeyrade
|
|
Tel.: +33 (0)1 40 76 12 74
|
|
stephane.lapeyrade@alcatel.com |
|
|
|
|
|
Alcatel Investor Relations |
|
|
|
|
Pascal Bantegnie
|
|
Tel: +33 (0)1 40 76 52 20
|
|
pascal.bantegnie@alcatel.com |
Maria Alcon
|
|
Tel: +33 (0)1 40 76 15 17
|
|
maria.alcon@alcatel.com |
Charlotte Laurent-Ottomane
|
|
Tel: +1 703 668 7016
|
|
charlotte.laurent-ottomane@alcatel.com |
Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: This press
release contains forward-looking statements relating to benefits that will result from strategic
partnerships, acquisitions and divestitures, and in particular the operations contemplated with
Lucent, Thales and Nortel. These forward looking statements are based on current expectations,
forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and
results to differ materially from those projected. These risks and uncertainties include: whether
Alcatel can continue to obtain product cost improvements and to implement cost cutting and
restructuring programs and whether these efforts will achieve their expected benefits, including
improvements in net income, among other benefits; the economic situation in general (including
exchange rate fluctuations), and uncertainties in Alcatels customers businesses in particular;
customer demand for Alcatels products and services; control of costs and expenses; international
growth; conditions and growth rates in the telecommunications industry and general domestic and
international economic conditions; the timing of closing and expected benefits from the operations
contemplated with Lucent and Thales; and the impact of each of these factors on sales and income.
For a further list and description of such risks and uncertainties, see the reports filed by
Alcatel with the Securities and Exchange Commission. Alcatel disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise.
6