Alcatel reduces losses, talks of return to profit

Alcatel reduces losses, talks of return to profit

French telecommunications equipment manufacturer Alcatel SA reported reduced losses for the third quarter on Thursday, and said there are indications it will soon return to profitability.

The company reported a net loss for the quarter of $US329 million as of September 30, compared to a net loss of $1.57 billion in the year-earlier quarter. Net sales for the quarter slipped to $3.54 billion from $4.09 billion a year earlier.

Sales of fixed communications equipment in the quarter slipped 15.8 per cent year-on-year to $1.56 billion, while mobile communications equipment sales dropped 16.2 per cent to $949 million. For these comparisons, Alcatel restated its figures for 2002 to take account of the sale of its Optronics division.

Investment in research and development in 3G (third-generation) mobile communications, applications software and IP (Internet Protocol) technologies is now paying off in the form of new contracts, but the company continues to lose money on mobile phones and optics, it said.

The best-performing business sector was private communications, where sales for the quarter slipped 6.4 per cent year-on-year to $1.14 billion. The company saw an increase in demand for its IP/PBX (private branch exchange) equipment in Europe, but this and other increases were offset by a decline in revenue from its space communications segment, it said.

Western Europe accounted for the lion's share of Alcatel's sales, at 42 per cent, with other European countries taking 7 per cent, North America 18 per cent, Asia 17 per cent and the rest of the world 16 per cent, the company said.

Alcatel, based in Paris, said it expects fourth-quarter sales to rise 20 per cent compared to the third quarter, enabling it to break even, excluding goodwill and non-recurring charges. For the full year, it expects a net loss roughly equivalent to goodwill and non-recurring charges, it said.

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