Alcatel cuts losses, sees some recovery by year-end

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

The net loss, €836 million (US$727 million as of March 31, the last day of the period being reported), is an improvement on the net loss of €1.50 billion in the fourth quarter last year, but still down on the net profit of €210 million it reported for the first quarter of 2001.

Losses from operations shrank to €343 million in the first quarter, compared to losses of €425 million in the fourth quarter last year, and an operating profit of €132 million in the first quarter of fiscal year 2001.

The Paris company reported net sales for the first quarter of €4.30 billion. In the year-ago quarter, sales stood at €5.86 billion.

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 Jan. 1, 2001. The restated 2001 results also exclude Alcatel's DSL (Digital Subscriber Line) modem business, sold in December 2001, and its European enterprise and services business, sold earlier this month.

Figures for the year-ago quarter before the restatement showed lower operating profit and the same net income, on much higher sales of €6.21 billion.

The results were affected by exceptional items mainly related to its submarine cable business, Alcatel said. Performance in broadband networking and mobile phone network infrastructure was more buoyant, it said in a statement.

There are no signs of recovery in any of Alcatel's markets, but the company is performing better as a result of streamlining its operations, it said. 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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