Alcatel-Lucent reported a drop in revenue during the third quarter, but the company still made a €194 million (US$268 million) profit. However, the future looks murky, the company said on Friday.

Revenue for the quarter ending Sept. 30 was €3.8 billion, down 6.8 percent year on year. The €194 million profit is an improvement over the same period last year, when it made €25 million.

Most of Alcatel-Lucent's divisions saw their revenue drop during the third quarter. Worst off were the wireline and network application divisions, which both saw sales decrease by more than 20 percent.

Sales grew in the enterprise and the IP (Internet Protocol) divisions, up by 8.9 percent and 2.7 percent respectively. Alcatel-Lucents's service router business helped drive growth for the IP division. Revenue in the enterprise division got a boost from data networks, as companies invested more in core and access networks, including Wi-Fi, Alcatel-Lucent said.

Alcatel-Lucent's numbers compare unfavorably with those of its competitor Ericsson. The Swedish company increased its revenue by 17 percent to 55.5 billion Swedish kronor ($8.4 billion), while its net income for the quarter was 3.8 billion kronor.

The grim economic situation, especially in Europe, means Alcatel-Lucent is in for a challenging last three months of 2011. The company now expects weaker revenues than initially planned in the fourth quarter, it said.