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

To: larry pollock who wrote (3780)	2/16/2002 5:07:21 AM
From: elmatador	Respond to of 3891

Alcatel denies claims of faulty accounting By Raphael Minder in Paris Published: February 15 2002 20:25 \| Last Updated: February 15 2002 22:41 Alcatel, the French telecommunications equipment maker, denied on Friday claims of accounting irregularities made by Pierre Suard, its former chairman, which helped push its shares almost 7 per cent lower. Mr Suard, who was forced to resign as chairman from what was then Alcatel Alsthom in March 1995 because of a judicial inquiry into the group's billing practices, suggested in an interview with newspaper Le Parisien that Alcatel had hidden annual losses of FF6bn(E915m, $796m) following his departure. "Mr Suard's comments concerning Alcatel Alsthom's accounts in 1995 are unfounded," Alcatel said. "The questioning is prejudicial to the company, which reserves the right to defend its interests and those of its shareholders by all appropriate means." Alcatel shares closed down 6.7 per cent at E16.06 on Friday. Traders attributed part of the fall to Mr Suard's comments, which came amid heightened concerns about corporate accounting methods following the collapse of Enron, the US energy group. However, Alcatel shares have also suffered from continued worries about the health of the sector and whether the group could meet its earnings forecast, following disappointing results from US companies. This week, Standard & Poor's, the credit rating agency, downgraded Alcatel's debt, arguing that it would be "a challenge" for Alcatel to stick to its first-quarter guidance. Mr Suard released this week a book to give his account of his tenure at Alcatel Alsthom, a group which was subsequently split into two entities. Mr Tchuruk, the current chief executive of Alcatel, took over from Mr Suard and has presided over a transformation which has seen Alcatel shed a collection of assets to focus on telecoms. Mr Suard told Le Parisien that Alcatel had reported an average annual profit of FF6bn in the years after his departure, but would have registered an average annual loss of FF6bn if it had excluded exceptional items. He did not provide further details.

To: larry pollock who wrote (3780)	2/19/2002 6:34:55 AM
From: larry pollock	Read Replies (1) \| Respond to of 3891

Alcatel Senior Debt Ratings Cut to `Baa2' by Moody's (Update2) By Jad Mouawad Paris, Feb. 18 (Bloomberg) -- Alcatel SA, a French phone equipment maker, had its senior debt rating cut one notch by Moody's Investors Service on concern increasing competition and slumping demand are pushing down prices for its products. The rating was downgraded to ``Baa2,'' two notches above junk, from ``Baa1,'' the credit agency said in a statement. It confirmed its short-term ``Prime-2'' rating as well as its ``negative'' outlook. Moody's cited a rise in price competition for its downgrade as well as a drop in spending from Alcatel's customers. The credit agency also cut Ericsson AB's long-term debt one notch to ``Baa2.'' Increased competition within the equipment sector ``could significantly erode any gains (Alcatel) makes through cost reduction because it will erode profit margins,'' said Chavan Bhogaita, an analyst at Bear Stearns. ``The problem for Alcatel and its competitors alike is the lack of any evidence the downturn has reached the bottom.'' The maker of network gear is trimming costs by a fifth so the company can break even on quarterly sales of less than 5 billion euros. Alcatel is shedding about a third of its workers and selling nearly half its factories. It cut debt to 2.7 billion euros at the end of last year, below a 4 billion-euro forecast. ``If market conditions continue to deteriorate more than expected, Alcatel's ratings could come under further pressure,'' Bhogaita said. ``Current bond spreads do not price in this further downside, hence we continue our sell recommendation on Alcatel bonds.'' Bonds Fall Alcatel's bonds fell. Its 1.2 billion euros of 7 percent bonds maturing in 2006 yield about 7.67 percent. That's 3.16 percentage points more than German government debt of similar maturity. That premium rose about 50 basis points today, according to BNP Paribas prices. Some bondholders ``got too optimistic due to the progress on the debt reduction,'' said Stephan Michel, credit analyst at Barclays Capital. ``You have to look beyond that -- Alcatel's going to continue to lose money and probably get worse. The prospects are grim.'' European phone companies have slashed spending to pay off debt after spending a combined $100 billion in 2000 to acquire high-speed wireless licenses. The cut comes a week after Alcatel's short-term credit rating was reduced one notch to ``A-3'' by Standard & Poor's. Alcatel's ``BBB'' long-term corporate credit and senior unsecured debt ratings were affirmed by S&P. Alcatel shares fell 6 cents to 16 euros, erasing earlier gains. The stock has lost 68 percent of its value in the past 12 months.