Alcatel-Lucent: pick up the phone Wonders will never cease. Even Alcatel-Lucent has some good news to report. The telephone equipment maker's shares soared 12 per cent on Friday after a half-decent set of fourth-quarter figures. That leaves them still at just one-sixth of their 2007 high. But after a series of disappointments, there is at least something for chief executive Ben Verwaayen to work on.After all, revenues of €16bn in 2011 grew only 2 per cent compared with a year ago. More importantly, Alcatel-Lucent generated positive free cash flow before capital expenditure (just). The paltry €19m inflow provided relief after the company experienced an outflow in 2010 of €190m and in 2009 of €68m. Shareholders were also handed a 2011 net profit of €921m, the first annual surplus since Alcatel and Lucent merged in 2006. All of this is a sign of progress. But the low share price shows how much ground Alcatel-Lucent has to make up. Mr Verwaayen talks of better operating margins in 2012, helped by another €500m of cost savings. But there is no guarantee that he will be able to raise revenues in the company's biggest division - networks - given that there is so much uncertainty about the capital expenditure plans of its customers.Sprint and Verizon are likely to help out in the US. Europe, though, may take longer to bottom out. Alcatel-Lucent sits uneasily between the telecoms equipment sector's technology leader, Ericsson, and Chinese companies such as Huawei that tend to compete on cost.The merger of Alcatel and Lucent has not worked out. Mr Verwaayen's fundamental task is to establish once and for all what the combined companies" rationale is, and to push the business forward. Otherwise, the company will become a takeover or break-up target. Investors have waited long enough for someone at Alcatel-Lucent to pick up the phone.