France Telecom has reported a surge in income, raised its earnings forecast, and snapped up the remaining shares in Orange, its mobile-phone arm.
France Telecom is focusing on its core businesses
The telecom giant, which only a year ago had to be bailed out by the French state, made pre-tax profits of 3.6bn euros (£2.5bn; $4.2bn) in the third quarter, up 27% year on year despite slightly lower sales.
Having met most of its targets so far this year, the firm is now forecasting pre-tax earnings of 17bn euros for 2003 as a whole.
France Telecom also gave notice that it was buying the last few outstanding shares in Orange, which it started to take private last month.
Orange shareholders who voted against or ignored France Telecom's buyback offer will have their holdings compulsorily purchased.
Orange's results, released at the same time as its parent's, were solid rather than spectacular, displaying an 8% year-on-year growth in revenues.
The markets were unexcited by France Telecom's figures, which had been widely anticipated.
Its shares jumped initially by 2%, before easing back to their starting level.
Some analysts were worried at the firm's stagnant revenues, as growth at online business Wanadoo failed to make up for continuing decline in fixed-line traffic.
Fixed-line phones weigh on France Telecom's results
Broadly, however, investors have cheered the changes set in motion by Thierry Breton, who took over as chairman just over a year ago, with the job of shepherding the firm through its financial difficulties.
France Telecom's shares have risen by half this year, after losing almost two-thirds of their value in 2002.
Mr Breton has slashed costs, including the loss of thousands of jobs and the launch of an austerity programme, and has focused on growing core businesses such as Wanadoo and Orange, rather than the expensive acquisitions it preferred in the 1990s.
Orange, meanwhile, continues to perform robustly.
It now boasts 47 million subscribers, putting it behind only Vodafone and T-Mobile on the European market.
While future growth in subscriber numbers is limited by Europe's saturated mobile market, the firm has claimed some success in boosting average revenue per user.
Solid revenue growth in the third quarter was the result of a publicity campaign persuading customers to get more from their mobiles - and to use the sort of premium-priced services that most operators are depending on for future growth.