From WSJ: Re: ALAÿ eps conference. I don't know if this was posted:
I take CEO Tchuruk's refusal to deny they are considering buying NN as proof positive that they aree !!.
if they were not considering it it would have been easy to
say no.
Looks to me that ALA with 120000 employees is ready to
make a big move into fast moving internet / telco world.
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Alcatel "Flawless" Performance Wins Investor Acclaim
ÿÿÿÿ By DAVID GAUTHIER-VILLARS
ÿÿÿÿ Dow Jones Newswires -- February 3, 2000
ÿÿÿÿ PARIS -- Alcatel SA (ALA) Thursday strengthened its image as a rising telecommunications equipment power house, delivering
ÿÿÿÿ 1999 earnings above market expectations and maintaining its operating margin target for this year.
ÿÿÿÿ Analysts, skeptical of the company since a shock profit warning late in 1998, said the performance was "flawless." The main
ÿÿÿÿ beneficiary is likely to be Alcatel itself, with most analysts moving swiftly to rerate the share, raising their price target above
ÿÿÿÿ EUR300 from EUR250.
ÿÿÿÿÿ "The stock has been treated like an outcast since the company's profit warning in late 1998," said a Paris-based trader.
ÿÿÿÿÿÿÿÿ "I think this will be over now."
ÿÿÿÿ The results and expected analyst reratings pulled the shares to EUR247.40 by the close, ahead 12% or EUR26.60.
ÿÿÿÿ Alcatel posted a 28% advance in 1999 full-year operating profit to EUR1.28 billion for the year ended Dec. 31, on a 8.3% jump
ÿÿÿÿ in revenues to EUR23.02 billion. The market had been expecting operating income of around EUR1.22 billion.
ÿÿÿÿ The group also said it's maintaining its operating margin target of 6.5% for this year, which implies a jump of around 30% in the
ÿÿÿÿ group's operating profit in 2000, Chairman Serge Tchuruk said in a conference call. Alcatel's operating margin stood at 5.5% in
ÿÿÿÿ the full-year 1999.
ÿÿÿÿÿ The group's telecom operations are valued on the stock market at a 35% to 40% discount to those of peers such as Nortel
ÿÿÿÿ Networks Corp. (NT) or L.M. Ericsson AB (ERICY), said an analyst at Societe Generale Asset Management. "Alcatel shares
ÿÿÿÿ now have the potential to fill part of that gap,"ÿ she said.
ÿÿÿÿ Alcatel Chief Financial Officer Jean-Pierre Halbron said 2000 full-year revenues should grow by between 12% and 13%,
ÿÿÿÿ underpinned by a 15% rise in revenues from the group's four telecom equipment divisions. He said operations at the company's
ÿÿÿÿ cable unit should be stable this year.
ÿÿÿÿ The company said research and development expenditure rose 17% for the full-year to around EUR2.1 billion. Tchuruk said this
ÿÿÿÿ spike in R&D spending was part of the group's effort to bridge the gap with competitors in some Internet and optical technologies.
ÿÿÿÿ Analysts said theyÿ also welcomed Alcatel's performance in fledgling markets such as asynchronous digital subscriber line
ÿÿÿÿ equipment.
ÿÿÿÿÿ Tchuruk said revenues from the sale of ADSL equipment reached $400 million in 1999, giving Alcatel a 50% world market share.
ÿÿÿÿ He said the group will aim to sell 2.5 million ADSL lines in 2000, up from 1.6 million in 1999.
ÿÿÿÿ ADSL technology allows telecom operators to increase the capacity of traditional copper wire networks to offer broadband
ÿÿÿÿ services.
Tchuruk declined to comment on speculation that his company is among front-runners to buy Canadian telecom network equipment
ÿÿÿÿ maker Newbridge Networks Corp. (NN).
ÿÿÿÿ Halbron said Alcatel could realize EUR2.5 billion in capital gains by selling stakes in Alstom SA (ALS), Societe Generale SA
ÿÿÿÿ (F.CGF) and Vivendi SA (F.VVN). He also said Alcatel had reasonably low gearing of 19% at the end of 1999, compared with
ÿÿÿÿ 3% at the end of 1998.
ÿÿÿÿ Alcatel's board will propose at the next shareholders meeting to pay a net dividend of EUR2.20 a share, 10% higher than in 1998.
ÿÿÿÿ The company will also seek shareholder approval forÿ a five-for-one stock split. The split will simplify trading in Alcatel's
ÿÿÿÿ American depository shares for U.S. investors, and boost the liquidity of the stock. One Alcatel share will be worth one ADS
ÿÿÿÿ once the split is completed.
ÿÿÿÿ -By David Gauthier-Villars, 33 (0)1 40 17 17 40
ÿÿÿÿ -david.gauthier-villars@dowjones.com |
