On April 26, ALU discussed Q1 2013 results. Although there were no comments about the reforms they will make (promised in June), what they did say and did not say may give us a hint of things to come.
Speaking of the performance pillar set in place by their predecessors, “The first was to drive revenue mix, products that are above the corporate average and gross margin.” A good plan, and follows Jack Welch admonition “Whip your thoroughbreds.”
So what do we see in his comments?
If you look at our IP product line which is the key to driving improved profitability, we had 9% overall growth in IT year-on-year … continued growth in IPD, which you know carries an above average margin for the overall corporation. (emphasis mine).
Definitely good news – whip it faster.
Wireless continues to do well. We are seeing good growth, especially coming out of North America this quarter and our wireless LTE revenue is the highest level it has even been.
No numbers mentioned here? The message is curious and sounds like good news, but absence of superlatives and margin commentary suggests an issue with wireless position in the corporate average and gross margins. As my mother says, “If you can’t say something nice, don’t say anything at all.”
Fixed networks continues to be a bright spot. While you can see we had that 10% year-on-year revenue growth …
Numbers are discussed later and nicer growth than wireless
Revenue breakdown commentary:
- networks and platforms saw a growth of approximately 6% year-over-year…
- the IP division grew 9% ...
- edge routers grew 12% …
- year-on-year reduction in the backhaul … net result is the overall 9%.
- wireless is approximately 6% year-on-year growth …
- fixed networks, it is about a 10% growth …
Although all the numbers are not discussed, we can read between the lines of what is said (and not said). ALU has done the math for us, so place your bets on the thoroughbreds, and we will see what Mr. Combes has in mind this summer. My bet is “Whip your thoroughbreds.” But what about the rest of the field?
