Alcatel-Lucent S.A. (NYSE: ALU) is out with its second-quarter earnings. While there is improvement in parts of the numbers, this remains a turnaround hopeful that is nowhere close to being fully turned around.

What will stand out here is that Alcatel-Lucent’s adjusted operating income rose to €136 million, and operating cash flow rose to €96 million. The advanced communications equipment provider showed a 5% increase in group revenues, excluding its Managed Services operations. It also represented that its gross margin rose by 140 basis points from a year ago and up 30 basis points sequentially to 32.6% — essentially driven by cost savings. Its ongoing Shift Plan, the turnaround and refocus plans, brought fixed cost savings of €94 million in the second quarter.

In another release, Alcatel-Lucent said that it is exploring an initial public offering of Alcatel-Lucent Submarine Networks in first half 2015. The company plans to maintain a majority stake in the company.

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Full revenues (including the Managed Services unit, rose by only 0.7% to €3.279 billion. The company’s ex-MS gains were due to what the company called a “very strong quarter in wireless, notably with LTE roll-outs in China and US.”

Alcatel-Lucent showed that its adjusted operating income was 4.1% of revenues, reaching €136 million. Another gain was in the profits of the Access segment, rising to €11 million.

All in all, there was a net loss if you include all items. Alcatel-Lucent said:

The Group showed a net loss of -298 million euro in the second quarter, or -0.11 euro per share. The improvement of 587 million euro compared to the second quarter of 2013 is mainly explained by a 552 million euro impairment charge in the second quarter of 2013, while higher level of operating income was partially offset by higher restructuring charges and the accelerated amortization of issuance fees ahead of the secured loan repayment.

Here were several notes regarding the individual geographic regions and units:

• North America was lower by 2.6% year-over-year.
• Europe grew 6% when excluding Managed services.
• Asia Pacific rose by 25.2% year-over-year, driven by LTE network roll-outs in China.
• Rest of World, MEA declined at a mid single digit, while CALA remained challenging.
• Core Networking segment revenues were €1,369 million, down 10.0%.
• IP Routing revenues fell by 7% to €561 million.
• IP Transport fell by 6.2% to €484 million.
• IP Platforms revenues fell by 19.2% to €324 million.
• Access segment revenues rose 9.5% to €1.907 billion.

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Thursday’s early bird trading in New York had Alcatel-Lucent ADSs down 7.5% at $3.56, but that was after a gain of about 3% on Wednesday. On last look, Alcatel-Lucent shares were down more than 6% at €2.66 in Paris, where trading volume is more active. It had seen more than 57 million shares trade hands, versus 22 million for a full average day, and that was with over three hours left in Paris trading.

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