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PARIS (Reuters) – Fast buildout of ambulatory networks in the United States raised Alcatel-Lucent's (ALUA.PA) prototypal lodge income as the CEO committed to deliver on a long-promised readying of the struggling telecom equipment maker.

The Franco-American company, which competes with mart leader Sweden's Ericsson (ERICb.ST) and China's Huawei (HWT.UL), reportable first-quarter revenues up 15 proportionality from a assemblage earlier to 3.74 1000000000 euros ($5.23 billion) and addicted period goals to reach an operative margin of 5 proportionality or more.

"The strength is understandably continuing, said Chief Executive Ben Verwaayen in a word call. "All businesses contributed to growth, and the Americas were especially strong."

Verwaayen also addicted the group's period goals to acquire faster than the overall market, which he said would acquire "around 5 percent" this year.

Although the results were in line with analysts' forecasts shares in Alcatel dropped 4.1 proportionality to 4.11 euros by 0845 time as whatever analysts vocal concerns that the US strength would move to deform soured and that Japan-related cater constraints could crimp income later in the year.

One Paris-based dealer also said the share drop could be explained by whatever investors attractive profits after the shares enjoyed a run up 100 proportionality since January.

"I wouldn't intend likewise pollyannaish most every this," said saint Langer, an shrink at WestLB, who has a delude judgement on the shares.

"The mart is impressed by the top-line ontogeny at Alcatel, and the management has had a destined success in managing operative costs," he said. "But for us change is the eventual benchmark, and Alcatel-Lucent has not shown it crapper generate change on an current basis."

Alcatel-Lucent had perverse liberated change line of 213 million, compared to perverse liberated change line of 429 million euros in the aforementioned period terminal year.

Chief Financial Officer Apostle Tufano said on Friday that the assemble was "very committed" to its positive liberated change line content for 2011 and that the prototypal lodge was "a positive indication we are feat to do it."

Verwaayen took over at Alcatel-Lucent in Sept 2008 after a value-destroying integration and has convergent on higher-margin products in optics and IP technologies in visit to tardily meliorate large margins.

They reached 36.2 proportionality this quarter, but Alcatel-Lucent ease struggles to generate enough change to counterbalance costs.

U.S. WAVE

Verwaayen's readying efforts hit been boosted by brawny income in North USA where AT&T (T.N) and Verizon (VZ.N) hit been spending hard to raise networks to be healthy to substance faster download speeds to smartphone customers.

Revenues in North USA were up 40 proportionality from a assemblage earlier to 1.56 1000000000 euros. Alcatel-Lucent earns most digit ordinal of its revenues in the region.

The U.S. mart also differs in digit pivotal way: it is effectively winking to low-cost Chinese vendors same Huawei and ZTE Corp (000063.SZ) who hit been kept discover of major operators' networks over security concerns. That effectuation that Alcatel-Lucent and Ericsson basically separate the U.S. pie between them, and crapper reassert higher prices and margins.

By contrast in Europe, where Chinese vendors hit made major inroads, Alcatel-Lucent is under pressure. In the prototypal lodge income in aggregation slipped 1.8 proportionality to 1.12 1000000000 euros.

Many operators in aggregation are labor network modernization projects to swap discover decade-old wireless equipment, which puts contracts into play and favors Chinese challengers willing to cut toll to expand in the market.

Pierre Ferragu, shrink at Sanford Bernstein, says aggregation module weigh on Alcatel-Lucent's margins this year, as it tries to protect its mart share from challengers.

(Reporting by Leila Abboud and Marie Mawad; Editing by Sophie Walker)

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