(UPDATE) Alcatel Has Flat 3rd-Quarter Sales On Weakness In Cables, Components
Dow Jones Online News, Wednesday, October 28, 1998 at 09:32
PARIS -(Dow Jones)- French telecommunications group Alcatel SA, which
has been heavily scrutinized after a recent profit warning, Wednesday
said its third-quarter revenue was about flat with year-ago levels, but
sales for the first nine months increased a bit.
Third-quarter sales stood at 30.7 billion francs ($5.54 billion),
compared with 31 billion francs a year ago. A major reason for that
slight decrease was a sharp decline in copper prices, the company said.
Nine-month revenue, meanwhile, rose 2.4% to 93.2 billion francs.
Third-quarter sales of the cables and components division decreased
by 9.8%, while sales in the telecommunications division rose by 10.1%.
"The fall in revenues of the cable division was in line with
expectations, while the company did slightly better than forecasted in
telecommunications," said Christian Royer, a trader at IFF Bourse.
Chairman Serge Tchuruk said "the goal of around 10% sales growth in
the telecom (division) for the full year should be reached."
Traders noted that Alcatel continues to be under a cloud after it
surprised shareholders with a profit warning after reporting poor
first-half results Sept. 17. The shares fell 38% on the Paris stock
market that day. The company had said its 1998 operating profit would
fall about 1.5 billion francs short of estimates because of canceled
equipment orders from big telephone operators and a deepening of the
Asian and Russian economic crises.
Alcatel (ALA) and other equipment makers must face up to a more
fundamental problem: The big, incumbent phone operators are cutting back
or delaying infrastructure investments in the face of growing
competition at home and uncertainty in Asian and Russian markets.
The company was hit particularly hard by canceled orders from
Deutsche Telekom AG. The German giant has deferred investing in certain
"local access" infrastructure because it is currently forced by
regulators to lease that portion of its network to rivals at low cost.
Alcatel, France's once-struggling trains-to-telecommunications
conglomerate, has been trying to reinvent itself as a high-tech company.
It sold off loads of businesses and is expanding its satellite
operations. The company recently purchased Texas-based telecom-equipment
firm DSC Communications Corp. for about $4.4 billion in stock.
Copyright (c) 1998 Dow Jones & Company, Inc.
All Rights Reserved. |
