BBC NEWS Americas Africa Europe Middle East South Asia Asia Pacific
BBCi NEWS   SPORT   WEATHER   WORLD SERVICE   A-Z INDEX     

BBC News World Edition
 You are in: Business  
News Front Page
Africa
Americas
Asia-Pacific
Europe
Middle East
South Asia
UK
Business
E-Commerce
Economy
Market Data
Entertainment
Science/Nature
Technology
Health
-------------
Talking Point
-------------
Country Profiles
In Depth
-------------
Programmes
-------------
BBC Sport
BBC Weather
SERVICES
-------------
EDITIONS
Wednesday, 30 October, 2002, 17:22 GMT
Alcatel debt cuts delight investors
alcatel optical lab
Alcatel's investment in optical telecoms technology has not paid off yet
Shares in troubled French telecoms equipment maker Alcatel have soared after the firm revealed good progress in cutting its debts.

Shares in Alcatel closed more than 40% higher at 5.20 euros on Wednesday, underpinning a strong performance from the French stock market.

The rally came after Alcatel said it was on track to cut its total debt to below 2bn euros ($1.9bn) by the end of the year, down from its previous estimate of 2.6bn euros.

The reduction in debt partly reflects a radical cost-cutting and restructuring exercise which has seen Alcatel axe thousands of jobs.

Losses widen

The lay offs are expected to leave the firm with less than half the 113,000 strong workforce it boasted at the height of the tech bubble.

The company's success in trimming its debts outweighed news that the firm had racked up bigger than expected losses for the three months to September.

The firm said losses had widened to 1.35bn euros from 558m euros one year earlier, citing a sustained downturn in telecoms investment and hefty restructuring costs.

On an operational level - excluding debt repayments and one-off costs - the firm lost 227m euros, while sales fell 37.5% compared with the same period last year.

But the company said it would return to operational profitability next year.

Future confidence

"We are quite confident in our capacity to generate an operating profit in 2003," said chief executive Serge Tchuruk.

"We have factored another deterioration in the market into our plans, and we've taken enough margin to protect ourselves."

But Stephane Houri at Fortis Bank warned: "Given the production overcapacity and debt levels of the main European (telecom companies), we see no ray of light on the market before end-2003."

Alcatel's rivals - firms such as Lucent, Nortel and Marconi - are in no better shape.

Telecoms firms are struggling to make profits in hugely competitive but mature markets.

This makes it difficult for companies to serve their huge debts, and in turn rules out new large-scale investments.

See also:

22 Oct 02 | Business
20 Sep 02 | Business
16 Aug 02 | Business
26 Jun 02 | Business
Internet links:


The BBC is not responsible for the content of external internet sites

Links to more Business stories are at the foot of the page.


E-mail this story to a friend

Links to more Business stories

© BBC ^^ Back to top

News Front Page | Africa | Americas | Asia-Pacific | Europe | Middle East |
South Asia | UK | Business | Entertainment | Science/Nature |
Technology | Health | Talking Point | Country Profiles | In Depth |
Programmes