RE: spinoff from Yahoo
Alcatel back in black, plans spinoff
by: ala3838 7/21/00 7:48 pm
Msg: 6822 of 6829
PARIS--Alcatel, a European maker of phone equipment, returned to a profit in
the first quarter as it benefited from demand for Internet-related products.
The company said it plans to sell shares in the energy cables division.
Alcatel posted net income of 258 million euros ($230.3 million), or 1.31
euros ($1.17) per share, up from a loss of 18 million euros ($16.1 million),
or 0.1 euro (9 cents) per share, a year ago. Sales in the quarter rose 42
percent to 6.1 billion euros ($5.5 billion).
Alcatel has spent $9 billion on acquisitions in the booming markets for data
networking and Internet access since a September 1998 warning that it would
miss profit targets, which sent its shares plunging. The purchases,
including Xylan, will help drive a 30 percent gain in telecommunications
sales this year, Alcatel said, raising an earlier forecast for growth in the
midteens.
"There are only good surprises here--and we had learned to brace for bad
ones in the past," said Jacques-Antoine Bretteil at International Capital
Gestion. "Alcatel has solid grounding to ensure strong growth."
Energy cables IPO
To better compete with rivals Ericsson and Lucent Technologies, Alcatel has
been narrowing its focus.
An initial share sale of the energy cables and components division,
representing annual sales of 4 billion euros ($3.6 billion), would turn
Alcatel into a "pure play" telecommunications company, it said. In cables,
Alcatel said it's second to Pirelli, which is buying the energy transmission
unit of Kentucky-based General Cable for $216 million.
Alcatel aims for a sale before the end of 2000, and the company will not
keep a stake in the operation, senior executive vice president Jean-Pierre
Halbron said.
Prior to the sale, it will absorb some activities from the division,
including the fiber-optics and submarine systems businesses that account for
about 3.3 billion euros ($3 million) in revenues, Halbron said.
"The cable spinoff is great news that the markets have been clamoring for,"
said Eric Burkel, an analyst at Handelsbanken Markets. "This very strong
quarter bodes well for an excellent year--Newbridge will be the icing on the
cake."
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