Despite an expected recovery of the telecom equipment market Alcatel-Lucent SA has decided to lower its profit- margin targets for this year, due to competitive pressures.

The group expects to reach an adjusted operating margin between 1% and 5%, this year and between 5% and 9%, in 2011.

"The broader target range should be seen as a little prudence. We are very focused on making our targets", said Paul Tufano, Alcatel's Chief Financial Officer.

Alcatel suffered sloth in demand, in 2009, as the operators cut spending in the economic downturn.

"A more stable economic environment and the explosive growth of mobile Internet will drive market growth in 2010 and beyond", said Ben Verwaayen, the Chief Executive.

In the fourth quarter, Alcatel posted a net profit of EUR46 million, compared with a EUR3.89 billion net loss for the same period, last year. Last year's hefty net loss stemmed from a EUR3.91 billion write-down of the value of assets, including aging mobile and optical network product lines.

It also posted an adjusted operating profit of EUR271 million, down from EUR297 million, last year itself.

The adjusted operating profit figure, which analysts use to gauge the company's operating performance, excludes items such as charges, related to the merger of Alcatel and Lucent.