Telecom giant France Telecom [FTE], bailed out by the French government only a year ago, has made pre-tax profits of $4.2 billion in the third quarter, that’s a 27% year on year hike, despite slightly lower sales. The firm is even forecasting pre-tax earnings of E17 billion for 2003 as a whole.
It also gave notice that it was buying the last few outstanding shares in Orange, which it started to take privately last month. Orange shareholders who voted against or ignored the buyback offer will have their holdings compulsorily purchased.
Orange’s results were not quite as impressive as its parent’s, displaying an 8% year-on-year growth in revenues.
Despite some worries at the firm’s sluggish revenues, as growth at online business Wanadoo failed to make up for continuing decline in fixed-line traffic, investors have on the whole cheered recent changes which have seen France Telecom’s shares rising by half this year, after losing almost two-thirds of their value in 2002.
Thousands of jobs have been shed as part of an austerity programme, and the company has focused on growing core businesses such as Wanadoo and Orange, rather than the expensive acquisitions it preferred in the 1990s.
In particular, Orange continues to perform. It now boasts 47 million subscribers, trailing only Vodafone and T-Mobile in the European market.
While further growth in subscriber numbers may be limited by a saturated European mobile market, the firm has boosted average revenue per user.
It came as the result of a publicity campaign persuading customers to get more from their mobiles – and to use the sort of premium-priced services that most operators are depending on for future growth.