Alcatel 3rd-Quarter Net Income Seen Tripling: Earnings
Outlook
By Jad Mouawad
Paris, Oct. 27 (Bloomberg) -- The following is a summary of Alcatel SA's expected
third-quarter earnings, scheduled to be released Tuesday.
Expected Earnings:
Europe's second-biggest telephone equipment maker is expected to report that net income
more than tripled to 260 million euros ($215 million) from 83 million in the year-ago period,
according to the average estimate of six analysts polled by Bloomberg News. Forecasts
ranged from 291 million euros to 225 million.
Operating income is forecast to have risen 86 percent to 550 million euros from 296 million
euros.
Analysts expect that revenue rose 35 percent to 7.08 billion euros from 5.26 billion. Their
forecasts ranged from 7.28 billion euros to 6.96 billion.
Release Time:
The figures are scheduled to be released before the Paris stock market opens.
Behind the Numbers:
Alcatel's earnings probably were boosted by its acquisition in May of Newbridge Networks
Corp. Alcatel bought the Canadian company to gain a stronger foothold in the market for data-
networking gear. Newbridge, among the biggest makers of ATM switches, provides equipment
that delivers voice, data and video on a single network. The products are used by telephone
companies to move large quantities of information such as e-mail.
Newbridge's results will be included for the first time in a full quarter.
Under Chief Executive Serge Tchuruk, Alcatel has been building up a position in Internet
equipment and software to keep pace with companies such as Lucent Technologies Inc. and
Nortel Networks Corp.
Alcatel, which trails Ericsson AB in Europe, has been focusing on telecommunications, optical
components and mobile phones in the past two years. It forecast sales will rise 35 percent in
2000 as it gains market share.
What the Experts Say:
``Alcatel said third-quarter growth would be stronger than in the second-quarter,'' said Peter
Knox, an analyst at Commerzbank in London. ``I expect a good, solid, set of numbers, without
many surprises, illustrating the company's steady progress.''
He rates Alcatel shares ``buy'' and expects them to reach 100 euros in 12 months.
``I'll be looking for the contribution from Newbridge,'' Knox said. ``Newbridge has roughly a 15
percent margin business -- that's nearly double the company's overall margin.''
Knox said he also will be watching the company's sales of ADSL equipment. Alcatel controls
more than 50 percent of the market for so-called Asymmetric Digital Subscriber Line
technology, which increases the transmission of data over traditional copper phone lines.
Previous Market Reaction:
Alcatel shares rose 3 percent on July 27 after the company said second-quarter net income
rose 43 percent to 344 million euros on demand for Internet equipment and mobile phones.
Market Performance:
The company's shares, the second-best performing on Paris's benchmark CAC 40 index,
have risen 55 percent this year. The CAC rose 4 percent in the same period. |
