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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting -- Ignore unavailable to you. Want to Upgrade?

To: Caxton Rhodes who wrote (8325)	3/9/2001 12:33:58 AM
From: Caxton Rhodes	Read Replies (1) \| Respond to of 196536

Alcatel sees slow mobile handsets sales in Q1 By Catherine Bremer, Reuters 08 March 2001 French telecoms equipment maker Alcatel warned on Thursday that mobile handset sales slowed in the first quarter but maintained earlier forecasts for overall group first-quarter and full-year turnover this year. An Alcatel spokeswoman said the company still expected to meet a forecast for group sales growth of 20 to 25 percent in 2001, although Chairman Serge Tchuruk has said turnover could come in at the lower end of that range. Echoing a chorus of bearish first-quarter news from other firms in the mobile sector, Alcatel said handset sales - which account for only seven percent of group revenues - were down so far this year and blamed excess stocks among clients. Shares in Alcatel - which was hit early last month when rival Nortel Networks slashed its 2001 revenue estimate - were down 2.32 percent at 46.25 euros by 0906 GMT. The company said in a statement it expected an operating loss at its mobile division but was implementing a cost-cutting programme so that overall consolidated group operating profits would not be hit. "First-quarter sales are displaying strong growth in carrier-based activities, both in networking and optics," it said. "Mobile phone sales on the other hand are displaying a year-on-year deterioration due to excess inventory in distribution channels at the beginning of the year as well as a general market slowdown." Alcatel, which has previously said it expected to sell around 25 to 26 million handsets this year, also said it still expected consolidated operating income for the first quarter to be in line with the first quarter of 2000, bolstered by the stronger networking and optics sales. "What's disappointing is that the rise in operating margins will be less than expected," said a Paris-based analyst. "We suddenly don't have the same visibility on the full year. We know they will try to limit the impact of the fall in mobile phone sales, but we don't know what effect that will have." Alcatel's warning came hot on the heels of a downgrade by Lehman on handset giant Nokia on Wednesday after comments made to the brokerage by Samsung and Texas about higher-than-expected inventories. "(The news from Alcatel) is not a surprise, it merely reiterates what everybody else in the sector is saying. We have known for a long time that telecoms growth will be nearer 20 percent than 25 percent," a second analyst said. (With additional reporting Pascale Denis).