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Qualcomm to Take Stake in Alcatel-Lucent

Alcatel-Lucent beat analysts' expectations for second-quarter profits


qualcomm-logoAlcatel-Lucent (ALU), a French based mobile phone manufacturer and telecommunications company, announced Tuesday, that U.S.-based chip maker Qualcomm (QCOM) would take a stake in the company.

The stake that will be taken by Qualcomm is an undisclosed, but small amount. Alcatel-Lucent hopes that other tech investors will follow Qualcomm. The company is looking for three to five investors that will take about a 5% stake in the company. The move to team up with more investors comes after Alcatel-Lucent beat analysts’ expectations for second-quarter profits, reports The Wall Street Journal.

“Alcatel managed a good performance in IP and optics, which translated into sales growth and better than expected gross margin,” Alexander Peterc, an analyst for Exane BNP Paribas in Paris, told Bloomberg. “This good news makes up for the poor cash performance. I expect the boost to the shares will continue.”

Part of the Qualcomm and Alcatel-Lucent partnership has the companies investing more than $750,000 into research. Neither company has disclosed how much it will contribute to the investment, reports WSJ.

ALU shares were up 2% Wednesday morning, continuing a 129% year-to-date increase.

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