Wednesday, March 23, 2011

France Telecom Facing Significant Challenges

France Telecom remains significantly challenged by decelerating trends in its wireline voice business, which is shrinking at a greater pace than its major European peers, as recession-hit customers terminate landline phones, analysts at Seeking Alpha say.

However, the company’s deleveraging balance sheet, healthy dividend payout and the combination of T-mobile and Orange’s network assets make the stock attractive for investment.

France Telecom reported strong fiscal 2010 earnings that were well above the Zacks Consensus Estimate and the year-ago earnings, Seeking Alpha says. Revenues improved slightly as the second half of 2010 was strong, particularly driven by growth in mobile services. But it arguably is international investments which will power much of France Telecom's future earnings growth.

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