France Telecom reports profit jump but sales slip
France Telecom reported a 45.4-percent leap in net profit for the first six months on Thursday driven by capital gains despite a slip in sales, and the share price rose 3.96 percent.
The net outcome of 3.72 billion euros (4.8 billion dollars) exceeded analysts' expectations, and the company stood by its targets for this year and next.
The price of shares in the giant telecommunications operator rose by 3.96 percent in early trading to 15.77 euros. The overall French market as measured by the CAC 40 index was showing a gain of 0.37 percent.
Chief executive Stephane Richard said that the results showed the capacity of the group to withstand difficulties "despite disruption of the economic climate on our main markets."
But sales in the first six months slipped by 1.2 percent, or by 2.2 percent on a comparable asset base, to 22.14 billion euros. Analysts had expected this figure to be 22.02 billion euros, as polled by CM-CIC Securities.
Richard said: "The fall in sales was less marked in the second quarter than previously, and we are attracting more clients."
In common with many once-monopoly fixed-line operators, France Telecom has been through a period of losing customers as the market was deregulated and new operators, notably of mobile telephones, attracted business.
The net profit surged mainly as a result of capital gains from the sale of assets in Britain as part of the creation of a joint venture called Everything Everywhere with T-Mobile, the company said.
But earnings before interest, tax, depreciation and amortisation fell by 3.7 percent, or 4.6 percent on a comparable basis, from 8.039 billion euros in the first half of last year to 7.745 billion euros.
This was ahead of market expectations for 7.67 billion euros.
The group stood by its forecasts for 2010 and 2011, four weeks after presenting them under its plan called Conquest 2015.
The group intends to generate internal free cash flow of 8.0 billion euros for 2010 and for 2011, and to hold annual sales broadly steady on a comparable basis and excluding any effects of changes in regulations.
It also said that it would maintain the dividend at 1.40 euros in 2010, 2011 and 2012 as in 2009.
© 2010 AFP