France Telecom Revenue Up 1.8% in First-Quarter

France Telecom said Thursday that first-quarter revenue rose 1.8% paced by a good performance in its personal communications services business.

The company also announced that the chief executive of its Orange mobile phone business, Sanjiv Ahuja, is stepping down to pursue new ventures.

Ahuja will be replaced by Olaf Swantee, who comes to the company after being senior vice president at Hewlett-Packard, responsible for enterprise sales and software in Europe, the Middle East and Africa.

The company also appeared to rule out any move toward taking an indirect stake in Telecom Italia SpA, which is currently hunting for partners.

When asked whether the company would be interested in buying into the group that controls Telecom Italia Gervais Pellisier, chief financial officer, said France Telecom is not interested in big mergers.

Revenue grew to 12.84 billion euros ($17.53 billion) from 12.62 billion euros ($17.23 billion).

The results are "a little better than expected," said Mike Meloan, a Goldman Sachs analyst. He said the announcement on Telecom Italia was "helpful for the share price, probably more so than the results."

Europe's second-largest telecommunications company, behind Deutsche Telecom, said the results confirm its guidance for 2007, namely keeping organic cash flow at euro6.8 billion ($9.28 billion), adjusted for the disposal of directory service Pages Jaunes at the end of 2006. Analysts and the company watch the organic cash flow figure closely.

The company's gross operating margin grew 2% to 4.657 billion euros ($6.36 billion) on general cost control and "prudent management of our commercial expenses." It did not release figures for net profit.

France Telecom confirmed it plans a dividend of 1.20 euros ($1.64) a share.