Alcatel rings up a profit in 2004

3rd February 2005, Comments 0 comments

PARIS, Feb 3 (AFP) - Alcatel posted a net profit in 2004 for the first time for three years on Thursday as the markets for telecommunications equipment began to improve, and the company forecast a new increase in operating margins this year.

PARIS, Feb 3 (AFP) - Alcatel posted a net profit in 2004 for the first time for three years on Thursday as the markets for telecommunications equipment began to improve, and the company forecast a new increase in operating margins this year.

Net profit reached EUR 281 million (USD 365 million) after a EUR 1.944-billion loss reported in 2003, marking the first time the company had turned an annual profit since the bursting of the technology bubble.

Meanwhile, sales fell to EUR 12.27 billion in 2004 from EUR 12.5 billion in 2003. But calculated on a so-called pro forma basis, excluding the impact of its divested mobile handset, optical fibre and power system businesses, sales rose 5.7 percent over the period.

Alcatel was severely hit by the shake-out which followed the end of the Internet and technology boom four years ago.

Chief executive Serge Tchuruk said that the increase was even better when calculated to smooth out variations in volatile exchange rates last year.

"While carrier markets showed a modest recovery, Alcatel's sales increased by close to 10 percent at a constant euro/dollar exchange rate," Tchuruk said in a statement, adding, "We are confident that Alcatel is on the right track."

Operating profits jumped to EUR 978 million from a pro forma EUR 449 million, yielding an operating margin of 8.0 percent.

Tchuruk said "We will maintain our strategic direction in 2005, closely monitoring our operations in order to reach our priority target, which is a 10 pct operating margin."

In the final quarter of 2004, the company turned a net profit of EUR 40 million compared with a loss of EUR 524 million in the same quarter in 2003.

Sales rose to EUR 3.812 billion over the period from EUR 3.009 while operating profit increased to EUR 393 million from EUR 334 million.

But analysts were expecting a much higher net profit figure for the fourth quarter and Alcatel's shares plunged 8.1 percent to EUR 10.33 at the opening of trading here in an otherwise flat market.

US brokerage Raymond James had forecast a fourth-quarter net profit of EUR 154 million while Exane BNP Paribas analysts had pencilled in a profit of EUR 180 million.

Despite the return to profit last year, chief financial officer Jean-Pascal Beufret said Alcatel would not pay a dividend for 2004 although it planned to do so in 2005 if possible.

The board decided against a pay-out this year, in order to be able to accumulate profits and issue a "more significant" dividend at a later date as well as aim at a "more durable" dividend policy, he said.

© AFP

Subject: French News

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