France Telecom, which less than two years ago had to be bailed out by the French Government, has recorded a net profit for 2003.
Trading conditions are modestly encouraging, the firm says
The company's full-year net profit was 3.2bn euros (£2.2bn; $4.1bn), compared with a loss of 20.7bn euros in 2002.
Previous results were battered by the need to write off non-performing assets, a process the firm says is now largely complete.
Its debts, which peaked at 70bn euros in 2002, are now just over 44bn euros.
The firm reiterated its cautious optimism about trading conditions, saying that sales should grow at 3-5% this year.
The figures were seen as respectable, but scarcely thrilling, by analysts, who had hoped for more concrete indications of growth.
The company's shares traded slightly higher after the results announcement, but without outpacing the broader French stock market.
France Telecom has been mending its finances and pruning unfavourable businesses for more than a year, but is still lagging rivals in terms of sales growth.
In particular, theoretically fast-moving subsidiaries such as mobile operator Orange and internet arm Wanadoo are still not delivering the sort of pace that investors want to see.
The core fixed-line business has remained robust, however, especially in comparison with fellow former state monopolies such as Britain's BT Group and German Deutsche Telekom.