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Alcatel expects jump in sales
PARIS, France (CNN) -- Shares in Alcatel, the French telecoms equipment maker, soared on Tuesday after it said fourth-quarter sales should grow by almost 30 percent and operating profit would be near the break-even point. Shares in Alcatel (PCGE) were up 17.1 percent to 6.51 euros in midday trading in Paris. Alcatel, Europe's largest maker of telecommunications gear, said in a trading update that improved sales were due to stronger-than-expected seasonal effects and sales of broadband equipment and mobile infrastructure. The company said fourth-quarter sales growth would be "in the high 20s" from the previous quarter and that operating income for the quarter "should be around break even, even after reserves on inventories of 150 million euros." It added that the "fourth quarter break even [point] should be at 4.1 billion euros with cost cutting proceeding well in line with plans." Alcatel said cash would exceed debt at the end of 2002. Alcatel will post its fourth quarter and year-end results on February 4. Chief Executive Serge Tchuruk was expected to give an update on the group's strategy later on Tuesday. The group has been aggressively cutting costs and has eliminated tens of thousands of jobs as it struggles with a weakening telecoms market and a collapse in capital expenditure by its biggest clients -- such as France Telecom and Deutsche Telekom. Alcatel has said the reorganisation will allow it to record an operating profit in 2003, even if the market deteriorates further. The group posted a third-quarter net loss of 1.35 billion euros ($1.3 billion) after being forced to set aside money for thousands of job losses and defaulting customers. In September, Alcatel said it would cut 10,000 more jobs in a desperate attempt to return to profitability. At the end of December 2001, the company employed 99,000 people. The latest round takes the total number of people to lose their jobs to 39,000 by the end of 2003.
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