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France Telecom First-Half Profit Beats Forecasts


France Telecom on Thursday posted a better-than-expected 1.7% rise in half-year underlying earnings helped by solid mobile sales in emerging markets.

The French fixed-line and wireless telecoms group, which operates also in the U.K., Poland, Spain and Africa, posted earnings before interest, tax, depreciation and amortization (EBITDA) of 9.416 billion euros ($12.87 billion).

The result compared with 9.258 billion euros in the  first half of 2006 on a reported basis and expectations of 9.305 billion euros based on a Reuters poll of eight analysts.

The operator confirmed its organic full-year cash flow target of 6.8 billion euros.

"We do not expect a drop in sales in the second half (compared with the first half) as happened last year," France Telecom Finance Director Gervais Pellissier said in a conference call.

Net income rose to 3.308 billion euros from 2.346 billion euros in the half-year 2006.

France Telecom's sales in the six month to June 30 rose to 25.913 billion euros from 25.371 billion euros as revenues from high-speed Internet services helped compensate the decline in traditional fixed-line voice activities.

Pellissier said the sale of France Telecom's Orange Netherlands business to Deutsche Telekom, which analysts estimate could fetch around 1.3 billion euros, was progressing.

"The process is still ongoing, the buyer is in talks with works councils," Pellissier said.

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