An Alcatel-Lucent statement said its net loss came to €146 million ($189 million), far above the loss of 108 million euros expected by analysts.
The figure included an after-tax accounting adjustment of €34 million related to the acquisition of Lucent by Alcatel in November 2006.
The tie-up between the two companies has been beset by problems and restructuring.
In the three months from July through September, the company also suffered an operating loss however, of €125 million, on sales that slipped by 2.8 percent on an annualised basis to €3.59 billion.
Analysts had forecast a much bigger drop in sales of 6.5 percent.
Company chief executive Ben Verwaayen was quoted as saying: Our third-quarter results are reflective of the significant transformation we are undertaking both in terms of scope and timing.
"In addition, our revenue growth and gross margin were impacted by overall carrier spending dynamics and product mix, especially in wireless, he added.
The CEO said that since the beginning of the year, Alcatel-Lucent had cut costs by €450 million, and was making progress with a plan to shed 5,500 jobs worldwide.
It has laid out a plan to find a total of €1.25 billion in savings by the end of next year.
The company now expects sales by the end of the year, and said its treasury was well stocked with a total of €4.7 billion at the end of September, a figure that was expected to remain positive at the end of the year.