Revenue up but profits down at Alcatel

27-07-2006

by Charlie Taylor

French telecoms equipment manufacturer Alcatel has reported that revenues for the second quarter grew 7.6 percent, but pre-tax profits fell 8 percent.

The company announced on Thursday that sales during the quarter totalled EUR3.38 million for its second fiscal quarter, compared to EUR3.14 million a year ago.

However, net income slipped to EUR180 million with diluted earnings per share reaching EUR0.13, down from EUR0.14 a year earlier.

The gross margin was 33.6 percent. Operating profit amounted to EUR263 million, or a 7.8 percent operating margin, and included a EUR12 million impact from a capital gain on the disposal of fixed assets.

Alcatel said that it enjoyed significant success in the US during the quarter where it registered 40 percent growth in dollar terms, driven by strong demand for triple play services. The company also recorded a 20 percent rise in dollar terms in China.

"Going into the second half of the year we expect to see the carrier market growing in the mid-single-digit range for full year 2006," said Serge Tchuruk, Alcatel's chairman and chief executive officer in a statement.

Tchuruk also said he expects the pending merger with Lucent Technologies to close during the fourth quarter.