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

To: zbyslaw owczarczyk who wrote (2796)	11/29/2000 6:29:19 PM
From: zbyslaw owczarczyk	Respond to of 3891

Alcatel stands by 2000, 2001 growth guidance (UPDATE: Adds stock price, forecast details, COO's comments) By Marcus Kabel DALLAS, Nov 29 (Reuters) - A top executive for the French telecommunications equipment maker Alcatel said it was sticking by guidance it issued a month ago for growth this year and in 2001, despite market concerns the telecoms sector was slowing. Krish Prabhu, Alcatel's chief operating officer and CEO for the Americas, told Reuters the company had reiterated in a presentation to analysts in Dallas the projections it made when it reported third quarter results on Oct. 31. At the time, Alcatel said some revenues had come in earlier than usual and so fourth-quarter growth could be six to seven percentage points lower than previously expected. But it raised forecasts for overall 2000 sales growth in telecoms of 35-40 percent, up from 35 percent and said Alcatel should see at least 25 percent sales growth in 2001 when it will be a pure telecoms player after the sale of its Nexans cables division. ``We have really no reason to issue new guidance on the fourth quarter. We stand by what we said during the third quarter results,'' Prabhu told Reuters in recapping the presentation to analysts, which was closed to the media. ``We've reiterated that we believe revenue will grow in the 25 percent range (in 2001),'' he added. Stock markets have been cool to big telecoms equipment makers like Alcatel since rivals Lucent Technologies (NYSE:LU - news) and Nortel Networks (NYSE:NT - news) posted disappointing third quarter results, raising questions about whether a boom in U.S. and global telecoms was slowing down. Alcatel closed earlier in Paris at 61.00 euros, up 0.49 percent, but well off a year high of 97.15 euros and low of 39.11. Prabhu also said Chief Executive Serge Tchuruk told analysts the company believed it could add 3 percentage points to global operating margin by ``fine tuning'' business processes, although this would only start to take effect in 2002. ``There is going to be a tremendous focus on that particular aspect next year. In fact, we've already started,'' he said. No timeline has been set for when the full 3 points can be realized, he said. Alcatel's operating margin was 7.83 percent in the third quarter versus 5.62 percent a year earlier and the company has said it plans to achieve double-digit margins next year. Prabhu said Alcatel was better positioned than most of its rivals to withstand any slowing in customer demand because 60 percent of its business globally is supplying networks and components to large established phone companies rather than start-up businesses. Start-ups in local telephone service, wireless and broadband communications have come under pressure as the stock market has shied away from technology companies, crimping their access to capital and forcing them to produce revenues or face collapse. ``We are somewhat better positioned mainly because the bulk of our business is still with incumbent phone companies, both here and in Europe,'' Prabhu said. ``Therefore to the extent that incumbent phone companies continue to invest in the build-up and upgrading of their networks, we are well positioned.''