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Paris (pte034/28.04.2005/12:30) - French telecoms equipment maker Alcatel http://www.alcatel.com has posted slight rises in first quarter operating profit due to ongoing 3G development. However, according to analysts, the profits were lower than expected due to declines at the mobile network unit. The company's revenue in the first quarter rose 3.7 per cent year-on-year to 2.61 billion euros. As the company reports in a press release on its website, despite a 69 million euro capital gain from the Nexans' share disposal, net income fell by more than a half to 124 million euros. The 2004 first-quarter profit had been boosted by 231 million euros worth of income from discontinued operations. Operating profit in the first quarter increased 27 per cent from the same period last year to 107 million euros.
As the Wall Street Journal (WSJ) reports, in the company's fixed line division, first quarter revenues decreased by 9.1 per cent to 987 million euros. Operating profit amounted to 50 million euros, representing a 5.1 per cent operating margin coming from a strong improvement in the optical networks business compared to the same period last year, Alcatel said. Revenue in the company's mobile communications division grew by 27.9 per cent to 789 million euros. According to Alcatel, radio infrastructure continued to show strong growth in emerging markets, in particular China, Russia, India and Brazil. In Western Europe, the company profited from the development of its 3G coverage. Operating profit in the mobile communications division amounted to 66 million euros. In the private communications division, first quarter revenues were stable at 848 million euros. Operating profits were at 34 million euros.
"First quarter results and business trends substantiate the assumptions underlying our full year outlook which is unchanged and which includes a ten per cent operating margin target," said Serge Tschuruk, Alcatel's chairman and CEO. The company said that it expects low to mid single digit growth in revenues in the second quarter and the full year at constant exchange rates. Earnings per share should increase at a double-digit rate in 2005, the company added.
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