Alcatel-Lucent’s losses widened in the three months to September following a €193 million impairment charge related to the vendor’s submarine business.

The company posted a net loss of €206 million in Q3, compared to €18 million the same time last year.

It said the larger net loss was mainly due to the impact of a writedown related to its submarine business, ASN.

There had previously been speculation that A-L would divest ASN as it prepares to be taken over by Nokia.

However, earlier this month the vendor revealed it would continue to operate the business as a wholly-owned subsidiary.

Despite this, the vendor said that cost savings had reached €872 million, representing more than 90 percent its Shift Plan objective of €950 million.

Further, revenues and margins improved during the quarter.

Aided by currency fluctuations, group sales rose five percent to €3.4 billion, while the company’s gross margins improved to 34.5 percent, compared to 34 percent in Q3 2014.

Core networking revenues rose 11 percent to €1.6 billion after growth across A-L’s IP Routing, IP Transport and IP Platforms businesses.

A-L said sales from non-telco customers grew at a “double-digit pace”, representing 15 percent of total IP Routing revenues.

IP Transport revenues rose six percent to €556 million, while strong demand for IMS and VoLTE in the US helped push sales of IP Platforms up 25 percent to €403 million.

The company’s Access business remained flat at €1.8 million in the third quarter.

Across the board, North America continued to be the most lucrative market for A-L, with sales increasing four percent to €1.4 billion.

However, the strongest growth was in Europe, where revenues increased 12 percent to €797 million, driven mainly by IP Routing and IP Transport sales.

In Asia-Pac, sales rose eight percent year-on-year to €779 million.

Philippe Camus, Chairman and CEO of Alcatel-Lucent, said: “I am very pleased to report that our efforts to drive profitability and strengthen margins have continued to bear fruit in the third quarter, along with our strategy to refocus on next-generation technologies.”

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