ALU 3Q07 results

Publié le par Jean Arnal

3Q07 revenues were €4.3bn, down 11%, while operating income was €70m and adjusted net loss in the quarter was $(258)m. The adjusted pro-forma net income was €532m. The Carrier Business unit revenues were €3.4bn, down 15%, and operating income was €22m. The wireline revenues were €1.5bn, up 5%, with growth driven by optical and submarine, broadband (8m DSL lines shipped), and IP routers. Mobile revenues were down 24% to €1.3bn, the decline being due to a sales peak in CDMA equipment last year, and weak GSM sales while improving qoq. In the Enterprise Business segment, revenues were up 5% to €380m and operating income was €29m. The Services Business segment reported 3Q07 revenues of €777m, flat, and operating income of €40m. A first concern is very low operating margins. As a consequence, CFO Jean-Pascal Beaufret was ousted and replaced by Hubert de Pesquidoux. In addition, 4,000 new job cuts will be added to previous 12,500, bringing the total number to 16,500 people leaving the company in coming months. ALU expects saving about additional €550m- €600m with the measures. An aggressive three-part plan was set-up, consisting in streamlining the core carrier business, developing an offensive strategy on sectors offering a strong growth potential, and streamlining the top management team with a focused 7-member management committee (instead of 21).

ALU outlook for the year is not, however, pink. It changed its full-year guidance for revenue growth, saying it now sees flat revenue for 2007, meaning that 4Q07 revenues would be up. There is currently a concern about telecom capex for coming months as main vendors have warned of poor market conditions.

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