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Technology Stocks : Alcatel (ALA) and France -- Ignore unavailable to you. Want to Upgrade?

To: Steve Fancy who wrote (1700)	5/4/2000 1:13:00 PM
From: Steve Fancy	Read Replies (2) \| Respond to of 3891

Alcatel Forecasts Raised On Positive 1Q Results, Outlook By VALERIE VENCK Dow Jones Newswires -- May 4, 2000 PARIS -- Alcatel SA's (ALA) upbeat first-quarter earnings, strong growth forecasts and expansion plans released Thursday prompted analysts to revise upward their forecasts for the group. The French telecommunications equipment supplier expects revenue to grow around 30% in 2000, and operating profit to rise some 60%. It reported first-quarter operating profit of EUR113 million, compared with a loss of EUR154 million in the same period last year, and a 42% rise in revenues to EUR6.12 billion, from EUR4.32 billion. Credit Lyonnais Securities Europe is now targeting the higher end of its EUR310-EUR320 target price, said analyst Susan Anthony. Lehman Brothers, meanwhile, said it has upgraded its target price to EUR320 from EUR300 following news Tuesday of Alcatel's joint venture with Japan's Fujitsu (J.FUT) on third-generation mobile telecom networks. While conceding that Alcatel is now undervalued, some analysts said it shouldn't be valued as high as its main rival, Cisco Systems (CSCO). Rather, it should be revalued on a similar basis to Ericsson (ERICY) and Nokia (NOK). Around 1125 GMT, Alcatel was trading hands at EUR270.6, up 7.6% or EUR19.1. Alcatel is "cheap compared with its peers," said Andre Chassagnol, an analyst at French broking house International Capital Bourse. Chassagnol said he maintains his EUR400 target price, although he concedes that this target may be reached earlier than late 2001, as expected. Alcatel also said Thursday that it has revised its growth forecasts for revenues from its telecoms activities in 2000 to 30% from 15%. Chassagnol said Alcatel's operating profit could exceed EUR2 billion - excluding its recent acquisition Newbridge Networks Corp. (NN), which will continue to be consolidated in Alcatel's results for at least six months. For full-year 1999, Alcatel reported an operating profit of EUR1.28 billion. Chassagnol also said he sees Alcatel revenues up 35% to 40%, and operating profit up 65% to 70%. "Alcatel has been quite conservative in its forecasts, ... so we can assume they may do better (than announced)," said Credit Lyonnais' Anthony. Meanwhile, Alcatel's plans to list its cable business on the Paris bourse by year-end is seen by analysts as a good move toward streamlining its telecoms strategy. Alcatel has been planning to exit the cable business for some time, and can now benefit from improved market conditions to do so, analysts said. "This is good because Alcatel is now going to be considered as a mere telecoms group," Chassagnol said. -By Valerie Venck; 33-(0)1-40-17-17-40 valerie.venck@dowjones.com -0- 04/05/00 11-45G