Telecommunications provider Alcatel-Lucent (News - Alert) reported its fourth quarter 2011 earnings this week, showing an annual profit for the first time in six years, according to media reports.

The Paris-based company also posted positive cash flow in the fourth quarter, causing shares to soar in early trade, The Wall Street Journal reported.

The company said that for Q42011, it reported a free cash flow of 541 million euros ($713.6 million U.S.) and annualized fixed costs savings of 300 million euros ($395.7 million U.S.).

Alcatel-Lucent’s improvement is due in part to the company’s decision to realize the potential of its patent portfolio, according to Ben Verwaayen (News - Alert), CEO, Alcatel-Lucent.

“I’m very pleased by the responsiveness of our company to adapt to a changing business environment. This has resulted in a significant improvement in free-cash-flow and an acceleration of cost-reduction actions,” Verwaayen said in a statement. “Overall, this concludes a second year of strong improvement in our results, and leads to the first positive full-year net results for Alcatel-Lucent since the merger,” Verwaayen said, in reference to the 2006 merger of Alcatel and Lucent Technologies.

The company strengthened its financial standing in its Genesys (News - Alert) divestment, he added, “while taking the strategic decision to realize the full value of our existing and future patent portfolio.”

Looking ahead, Alcatel-Lucent plans to focus on its software assets and wireless and fixed-line products, according to Verwaayen, who noted the company was “operating in a challenging environment in 2011.”

“Looking ahead, we target, in 2012, additional savings of 200 million euros in fixed costs and 300 million euros in variable costs,” Verwaayen said. “We will continue to strengthen our portfolio, drawing upon an innovation pipeline of software assets and breakthroughs in wireless and fixed-line technologies such as lightRadio, 100G coherent technology, IP and vectoring – innovations that enable operators to quickly adapt to the continuing explosion of data and content.”

Alcatel-Lucent’s goal for 2012 is to achieve an adjusted operating margin higher than the level reached in 2011, and reach a strong positive net cash position at the end of 2012, he added.

In October 2011, Alcatel-Lucent received a $1.5 billion binding offer from private-equity firm Permira for its call center services unit Genesys. Alcatel-Lucent finalized the deal on Feb. 1, following regulatory approvals in Europe and the U.S. Permira offered to pay the $1.5 billion in cash.

The day before the earnings report was released, news broke that Alcatel-Lucent will eliminate as many as 1,800 positions in Europe through firings and relocation, according to a report that cited information from a “top union official.”

Philippe Saint-Aubin, a representative of the European workers’ council for Alcatel-Lucent told Bloomberg (News - Alert) that almost 500 positions in Italy, or 20 percent of the total in the country, will probably be eliminated. In addition, more than 10 percent of the workforce in Belgium, and five percent in France, where Alcatel employs 9,000 workers will likely be cut, he said.