Alcatel-Lucent today posted an unexpected net profit of EUR14 million (US$19.7 million), albeit driven by after-tax gains of EUR277 million from the sale of its satellite business and its stake in French defence contractor Thales. It is Alcatel-Lucent’s first profit since the company’s creation in a transatlantic merger in 2006 and ends a streak of nine consecutive quarterly losses, most recently reporting a Q1 net loss of EUR402 million. Operating loss widened to EUR130 million in the April through June period on sales that slipped 4.8 percent to EUR3.91 billion. The company’s shares were up almost 8 percent at EUR1.90 in early morning trading. On the mobile side, revenues for its wireless networks division were EUR975 million, a decline of 5.3 percent from the year-ago quarter. However, buoyed by its recent commercial LTE deployment win at US operator Verizon Wireless, the vendor noted that “momentum in LTE continues to build up with several operators selecting Alcatel-Lucent for their trials this quarter.”

CEO Ben Verwaayen admitted that the company – which unveiled a major new strategy last December in an effort to turn itself around – still has challenges ahead, but reiterated plans to hit break-even adjusted operating profit this year followed by moderate profit next year. To date, the vendor has achieved approximately 35 percent of its plan to reduce costs and expenses by EUR750 million by the fourth quarter of this year. Such cuts come as the vendor faces a telecoms market that it continues to expect to decline between 8 and 12 percent this year.