Alcatel Profit Dips 16% On Tax Charges
LONDON (Dow Jones) -- Alcatel, the French telecommunications-equipment provider that has agreed to buy Lucent Technologies, on Thursday said its quarterly profit fell 16% on higher tax charges.
Net income at Europe's second-largest gear vendor slipped to 104 million euros ($129 million), or 0.08 euros a share, from 124 million euros, or 0.09 euros a share, a year earlier, in line with analysts' forecasts.
The profit figure this quarter included capital gains of 0.02 euros a share compared to capital gains of 0.05 euros a share in the year-ago period.
Sales increased 18% to 3.07 billion euros, ahead of consensus forecasts for sales of 2.9 billion euros, according to analysts polled by AFX News.
Alcatel at the time of the fourth-quarter results guided to revenue growth of 10% in the first quarter.
Its operating margin, however, was 6.5%, disappointing some analysts, and its guidance for the next quarter also didn't impress.
Alcatel shares fell 3.7% shortly after the market opened in Paris.
Fixed communications revenue rose 29% to 1.27 billion euros on a migration from dial-up services to high-speed Internet connections.
Operating profit at the division more than doubled to 110 million euros, representing an operating margin of 8.6%.
"We saw an extremely good performance in our wireline business coming from a favorable geographical and product mix, particularly in our access, optical and IP activities fueled by strong growth in North America," Chief Executive Serge Tchuruk said in a statement.
Mobile communications sales rose 15.1% to 908 million euros as Alcatel's third-generation product family gained momentum. Operating profit dipped to 57 million euros from 66 million euros.
Sweden's Ericsson, the world's largest maker of mobile-phone networks, last week reported flat profit in the first quarter due to the acquisition of U.K. peer Marconi and receding margins.
Private communications revenue increased 6.7% to 905 million euros on demand for enterprise and integration services. Operating profit in that division rose to 48 million euros from 34 million.
Alcatel reiterated its forecast for the carrier market to grow in the mid single-digit range in 2006 and said it expects revenue growth at the group to be ahead of the carrier market rate.
In the second quarter, Alcatel expects sales growth to slow to the range of 5% to 7%.
Earlier this month Alcatel agreed to buy U.S. peer Lucent for $13.5 billion in the hope that it will help it sell more equipment to big American phone companies and long-time Lucent customers such as AT &T Inc (T) and Verizon Communications (VZ) .
The combined company will have a market value of $36 billion and would have had 2005 sales of $25 billion, according to the companies.
Alcatel this month also sold its satellite operations to French defense-electronics firm Thalesto focus on its core business.
Shifting Alcatel's satellite operations to Thales will allow the French government to preserve the secrecy of its military contracts after the Lucent deal.
(END) Dow Jones Newswires "
Posted to the site on 27th April 2006