Since the beginning of this year, the company's share price has dropped by 12 percent, reflecting its merger-induced problems.

    So where is AlcaLu feeling the pain? Mostly in mobile and traditional voice systems.

    Its Carrier Business unit reported revenues of €3.1 billion ($4.2 billion), down 8 percent from a year ago (see table). Wireline revenues were up 3 percent at €1.5 billion ($2 billion), with strong performances from the vendor's access and optical (terrestrial and submarine) lines of business, but wireless was down 11 percent at €1.24 billion ($1.7 billion), hit mainly by low sales of GSM infrastructure in Africa and Eastern Europe.

    The company is boasting, though, of traction in the WiMax market, where it claims to have 70 trial systems deployed. (See French JV Pushes on With WiMax, AlcaLu Partners in Russia, AlcaLu Scores WiMax Wins, Casema Tests With AlcaLu, and AlcaLu Wins WiMax Deal.)

    Also indecline is the Carrier Business unit's Convergence business, which includes TDM and IP-based voice switching systems, including the company's IMS (IP Multimedia Subsystem) portfolio. Revenues dipped 29 percent year on year to €362 million ($496 million) as the increase in "next generation core" sales couldn't make up for the slump in "classic core switching revenue."

    AlcaLu's Enterprise unit fared better, reporting revenues 2 percent higher at €376 million ($515 million), with a "strong performance in Western and Eastern Europe."

    The Services Business unit also grew, with revenues up 7 percent to €750 million ($1 billion) boosted by continued demand for IP transformation and multi-vendor maintenance services.

    Overall, AlcaLu's management says the company is showing signs of recovery after an initial difficult post-merger period. "As we have said, 2007 is clearly a transition year for the company as we continue to execute on our integration plans in a rapidly changing industry," stated CEO Pat Russo in a prepared statement ahead of the company's earnings conference call. "We are seeing the benefits of the merger with momentum building in our order flow for the second consecutive quarter. As a result, our order backlog at the end of the second quarter 2007 continues to improve compared to first quarter 2007," she added.