Alcatel predicts recovery despite losses

Alcatel has reduced both its net loss and its loss on operations for the first quarter, compared with the previous consecutive...

Alcatel has reduced both its net loss and its loss on operations for the first quarter, compared with the previous consecutive quarter, although its results are still down on the profit it reported a year ago.

The losses were in line with previous announcements and the company expects to be making a profit on operations again by the second half of this year, it announced today.

The net loss, €836m (£517m), is an improvement on the net loss of €1.5bn (£928m) in the fourth quarter last year, but still down on the net profit of €210m (£130m) it reported for the first quarter of 2001.

Losses from operations shrank to €343m (£212m) in the first quarter, compared with losses of €425m (£263m) in the fourth quarter last year, and an operating profit of €132m (£81.6m) in the first quarter of fiscal year 2001.

The Paris company reported net sales for the first quarter of €4.30bn (£2.6bn). In the year-ago quarter, sales stood at €5.8bn (£3.6bn)

Alcatel restated its results for 2001 on a comparable basis, to reflect changes in the structure of the company.

The restated figures exclude cable manufacturer Nexans SA, following its sale in June 2001. It was retroactively deconsolidated from 1 January, 2001. The restated results also exclude Alcatel's DSL (Digital Subscriber Line) modem business, sold in December, and its European enterprise and services business, sold earlier this month.

Figures for the same quarter last year before the restatement showed lower operating profit and the same net income, on much higher sales of €6.2bn (£3.8bn).

Alcatel said exceptional items related to its submarine cable business had affected the results. Performance in broadband networking and mobile phone network infrastructure was more buoyant.

There are no signs of recovery in any of Alcatel's markets, but the company said it is performing better as a result of streamlining its operations. It forecasts growth in revenue and operating income each quarter, and expects operating income to turn positive again in the second half of the year.

The company expects to make a small operating profit on the full year, if economic conditions do not deteriorate further, it said.

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