French-American telecom equipment resurrection story Alcatel-Lucent (NYSE:ALU) is back!

After teetering on the brink of bankruptcy in 2012, Alcatel-Lucent and its new management team have gone a long way to stem the financial bleeding that nearly threatened to sink it. To that point, it showed investors just how far it's come with its recent earnings report and it's dealing with a possible merger with Finnish telecom equipment giant Nokia (NYSE:NOK) as well.

Alcatel Lucent Logo

Source: Alcatel-Lucent.

To be clear, Alcatel still has a long way to go in order to complete its comeback, but its recent earnings report did demonstrate genuine progress. Although revenue remained flat for the quarter, Alcatel managed to meaningfully reduce its net loss and expand its gross margins versus last year's.

Alcatel-Lucent's Nokia merger remains elusive
Investors watching the telecom equipment space have cited Alcatel-Lucent and Nokia as a natural fit for some time now. Both are substantially smaller in terms of revenue than the largest players in this space. Nokia is also currently flush with cash from the recently completed sale of its iconic handset division to Microsoft, which could give Nokia the financial firepower to pull the trigger on buying Alcatel-Lucent. However, Alcatel-Lucent's CEO recently dispelled the notion that a Nokia tie-up is on the table, at least in the short term.

In the video below, tech and telecom specialist Andrew Tonner looks at the recent news on Alcatel-Lucent and its possible Nokia merger.

Andrew Tonner has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.