Alcatel reports Q4 profit and sees brighter outlook

French telecommunications equipment vendor Alcatel showed guarded optimism for the year ahead, as it reported a small profit and an increase in net sales for the fourth quarter.

Net income for the quarter totalled Euro 40 million (US$55 million as of Dec. 31, 2004, the last day of the period reported), up from a loss of Euro 524 million in the corresponding period a year earlier, Alcatel said Thursday.

The company reported net sales of Euro 3.81 billion, compared to Euro 3.44 billion in the year-earlier quarter. For comparison purposes, the company restated results for earlier quarters to exclude sales from discontinued operations in its optical fiber, mobile phone handset and power systems businesses, which it sold during the year. This accounting change had no effect on net income, but lowered figures for sales, Alcatel said.

Sales of fixed communications equipment declined slightly, but sales of mobile communications equipment rose. Operating income in the fixed communications equipment remained steady, held up by IP (Internet Protocol) networking equipment, while at the mobile communications business unit operating income rose. Steady operating income in the private communications division was driven by enterprise networking and signalling equipment for railway operators, the company said.

Alcatel, based in Paris, does business predominantly in Western Europe, which accounted for 45 percent of revenue during the quarter. Other European countries accounted for 7 percent, North America 11 percent, Asia 14 percent and the rest of the world 23 percent.

The company has spent the last year developing or acquiring new technologies, and has recovered faster than the rest of the telecommunications equipment market, it said. Alcatel expects an upturn in the fixed-communications market around the middle of the year, leading to sales growth for the first quarter and full year of between 1 percent and 6 percent.

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