Earnings: France Telecom Earnings Flat; Hits Expectations; iPhone Helps Orange France


France Telecom (NYSE: FTE) reported third quarter earnings before interest, tax, depreciation and amortisation (EBITDA), or gross operating margin (GOM), of 5.091 billion euros ($6.5 billion), compared with 5.094 billion euros ($6.66 billion) from a year earlier. Revenue remained stable, rising 2.3 percent to 13.55 billion euros ($17.7 billion) from 13.51 billion ($17.6 billion) on a like-for-like basis. Earnings and revenue both hit analyst expectations. The French carrier, which operates under the Orange brand, said that aside from Spain and some emerging markets, it saw “no impact” on its operations from the slowing economy.

Third quarter revenue at its wireless business came in at 7.604 billion euros ($9.9 billion), up 0.8 percent on an historical basis and up 5.1 percent on a comparable basis. Mobile broadband continues to be a hit with customers, with an 81 percent jump in the number of subscribers at 23.2 million as of 30 September 2008, compared with 12.8 million at 30 September 2007. The iPhone, in particular, helped boost sales at Orange France, where the operator is the exclusive carrier of the gadget. As of the end of the quarter, 216,000 units of the handset have been sold.

Earnings Highlights:

— Mobile subscribers: At the end of Q3, the number of mobile subscribers totaled 117.6 million, excluding MVNOs. Year on year, the operator saw a 12 percent increase in new customers, adding 12.6 million in the first nine months, of which 3.2 million were added in Q3. France Telecom also reported a “sharp increase” in data services, which climbed 18.1 percent year on year. In particular, non-SMS data services was boosted by smartphone sales, new data tariffs and content offerings.

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