Alcatel Narrows Losses, Forecasts Sales DropAlcatel Narrows Losses, Forecasts Sales Drop

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

The net loss compared with a loss of 1.5 billion euros for the same period a year earlier.

Revenue fell 33% to 4.51 billion euros ($4.83 billion) from 6.77 billion euros a year ago.

Despite lower revenue, the company had an operating profit of 20 million euros ($21.5 million) in the quarter versus a loss of 368 million euros a year earlier.

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 chairman Serge Tchuruk said the industry slump would linger into this year.

"The first quarter 2003 will show the impact of the market downturn witnessed (in) 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% in 2003, Tchuruk also said.

Alcatel makes digital subscriber line products that turn conventional copper phone wires into high-speed Internet gateways. It is Europe's biggest telecommunications concern.

For the full year, Alcatel's net loss was 4.75 billion euros ($5.1 billion), compared with a loss of 4.96 billion euros in 2001. Revenue dropped 35% to 16.55 billion euros ($17.7 billion) from 25.35 billion euros in 2001.

Its operating loss for 2002 was 727 million euros compared with a loss of 361 million euros a year earlier. Analysts had anticipated an operating loss of 751.6 million euros 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.