France Telecom earnings soar 41% on strong domestic business

France Telecom posted first-half net profit up 41% with the group showing strength in its domestic business while pursuing rapid growth in emerging markets, an Associated Press report said.

The Associated Press report said net profit rose to 3.31 billion ($4.5 billion euros) from 2.35 billion euros ($3.22 billion) a year earlier.

The rise in net profit was helped by a 671 million euros ($912.5 million) drop in income tax from the 'recognition of deferred tax assets in France' and a change in the income tax rate in Britain, a statement by France Telecom said.

The telecommunications giant confirmed its outlook for 2007 of a 'near stabilization' of its gross operating margin rate and organic cash flow of 6.8 billion euros ($9.25 billion), adjusted for the sale of its listings unit PagesJaunes Groupe at the end of 2006.

The Associated Press report also said revenues at France Telecom increased 2% to 25.9 billion euros ($35.2 billion) from 25.4 billion euros ($34.8 billion) a year earlier.

The report said the group's residential services, seen as an area of weakness, gave a stronger than expected showing as rapid growth in ADSL broadband compensated for declining trends in traditional telephone services.

First-half revenues rose 0.4% to 11.2 billion euros ($15.2 billion) while the core French residential market proved resilient with revenues up 1.4%.