ALU reported 4Q07 operating profit of €303m (vs a loss of €3m) and up 20% on consensus, on revenues of €5.2bn, up 18%. Net earnings, however, was a loss of €2.6bn, and 2007 net loss amounted to €3.5bn, after it included a combined write-down for its CDMA infrastructure and IMS lines of business of €2.5bn. Full year revenues were €17.8bn, down 2.5%, while net loss €443m without the one-time charges.
The breakdown of revenues by segment highlights the decline in the Carriers unit revenues (down 6%), a 5% growth in Enterprise revenues and 8% growth in Services. Within the Carriers Unit, the Mobile and Convergence divisions reported 9% and 27% drop in revenues respectively, but hiding strong increase in GSM revenues, while the Wireline unit reported a gain of 5%, driven by optical products and data revenues.
In short, 2007 was not a good year and share sank 60% from end 2006 and almost 17% this year. Market capitalization is now below €10bn. 2008 is not announced as a great “millesime” either. ALU confirmed what rivals have already said, 2008 would be "flat to slightly up" at constant euro-dollar exchange rate and "slightly down" at the current rate.