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Paris (pte029/03.02.2005/11:15) - French telecom manufacturer Alcatel http://www.alcatel.com has disappointed investors, after it posted a net income of 40 million euros for the fourth quarter of 2004. As the company reports in a statement on its website, this is about a third of what analysts were hoping for, despite making a return to profit following losses of 524 million in the 2003 Christmas quarter. The company blamed the losses on investments in emerging markets, which impacted the gross margin, falling to 34.4 per cent in the fourth quarter compare with 17.3 per cent for the year as a whole. http://www.alcatel.com/vpr/
"An aggressive strategy has also been followed in establishing footprints in certain high potential markets of the emerging world, accepting temporary losses as an investment for future growth," said Serge Tchuruk, Alcatel's chairman and chief executive. Although the company failed to restore dividend payments, it said it would "perhaps" make a pay-out in 2005.
Despite the disappointment in the three months to the end of December, 2004 was a year of improvement for the group. It reported annual net income of 281 million euros, compared with losses of 1.9 billion euros in the previous year as all its markets partially recovered. It has also made strong inroads into in-demand "triple play" solutions, used for integrating telecoms, internet access and entertainment home technology. Sales rose by 5.7 per cent to 12.3 billion euros for the year and by 10.7 per cent to 3.8 billion euros in the final quarter.
The French company has predicted first-quarter and full-year sales growth of around 3-5 per cent. "We expect a positive inflection in fixed communications by mid-year, with our sales fuelled by the triple play momentum, a continuation of growth in mobile communications due to our good positioning in emerging markets, and significant progress achieved in vertical markets for our private communications group," added Tchuruk. Following the announcement by Alcatel, the company's shares were down nearly 9 per cent to 10.24 euros.
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