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Alcatel posts fourth quarter loss, forecasts sales drop early 2003

Posted on: Tuesday, 4 February 2003, 06:00 CST

Source: Associated Press

PARIS (AP) -- French telecommunications equipment maker Alcatel reported a 1.12 billion euro (US$1.2 billion) loss for the fourth quarter of 2002 and forecast that sales would drop between 25 and 30 percent in the next quarter.

The net loss compared with a loss of 1.5 billion euros (US$1.61 billion) for the same period a year earlier.

Alcatel chairman Serge Tchuruk attributed the losses primarily to an industry slump that he said was expected to effect the company into early next year.

``The first quarter 2003 will show the impact of the market downturn witnessed mid-2002,'' Tchuruk said in a statement.

Continuing weak demand and the weakening of the dollar against the euro should lead the telecommunications equipment market to fall by a further 15 percent in 2003, Tchuruk also said.

As part of massive cost-cutting measures, Alcatel has announced plans to reduce its worldwide work force to 70,000 by the end of 2003 from 110,000 at the end of 2000.

Alcatel, which makes digital subscriber line products that turn conventional copper phone wires into high-speed Internet gateways, said it made an operating profit of 20 million euros (US$21.5 million) in the last quarter of 2002.

It was a strong improvement from the 368 million euro (US$395 million) loss Alcatel posted in the fourth quarter of 2001.

For the full year, Alcatel's net loss was 4.75 billion euros (US$5.1 billion), compared with 4.96 billion euros in 2001.

Analysts had anticipated an operating loss of 751.6 million euros (US$806.2 million) for 2002.

Alcatel also said it plans to convert its Alcatel Optronics tracking stock into ordinary Alcatel shares. The decision will be submitted for approval at its annual shareholders meeting in mid-April.

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