Orange Profit Up as International Sales Grow -- 4th Update
October 25 2016 - 9:12AM
Dow Jones News
By Nick Kostov
PARIS-- Orange SA's shares jumped Tuesday as investors cheered
its performance in France despite intense competition in its home
market.
The Paris-listed company said sales rose 0.4% to EUR10.32
billion ($11.23 billion) in the three months to Sept. 30. That
helped push up third-quarter earnings before interest, taxes,
depreciation and amortization, or Ebitda, by 1% to EUR3.6 billion,
slightly above analysts' expectations of EUR3.58 billion.
Orange's revenue in France fell 0.5% to EUR4.77 billion in the
three months, an improvement on a 1.2% drop in the previous
quarter. The company said it had added 134,000 domestic fixed
broadband customers in the quarter and 187,000 net new mobile
contracts in the period without lowering prices in the wireless
segment.
Raymond James analyst Stephane Beyazian said fixed-line growth
in France almost offset the decline in mobile revenue, "hence it is
reassuring that competition in French mobile isn't as intense as
feared lately," he said.
Orange shares rose 4.7% to EUR14.77 in afternoon trading in
Paris.
Having failed to buy Bouygues Telecom for EUR10 billion in
April, Orange is now stuck competing with three rivals in the
French market, where a 4G mobile phone plan is available for less
than EUR20 a month.
Chief Executive Stephane Richard is betting it can beat out
rivals by focusing on the quality of its network and services
rather than lowering prices like some of his competitors. He is
also expanding the company's operations in the Middle East and
Africa and is pushing into mobile banking through the acquisition
of Groupama Bank.
Revenue rose 5.9% in Spain and 5.1% in Africa and the Middle
East.
Sales continued to be pressured by the European Union's push to
cut roaming charges in the region ahead of plans to abolish them
altogether. That change should result in a EUR150 million to EUR170
million hit to revenue in 2017, Orange Chief Financial Officer
Ramon Fernandez told analysts.
Orange confirmed its full-year target of posting higher Ebitda
in 2016 than in 2015 on a comparable basis. It also said it plans
to propose a dividend of EUR0.60 a share.
"The fourth quarter will be better than the third," Mr.
Fernandez said.
Write to Nick Kostov at Nick.Kostov@wsj.com
(END) Dow Jones Newswires
October 25, 2016 08:57 ET (12:57 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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