France Telecom SA posted a 10.3% increase in quarterly revenue, but said regulator-enforced mobile tariff cuts and fierce competition in fixed-line offerings hurt core earnings, an Associated Press report said.
The report said revenue of Europe's second-largest telecom operator rose to 12.81 billion euros ($15.92 billion) in the January-March period from 11.62 billion euros ($14.55 billion) in the year-earlier period.
But a 6.7 % increase in core earnings, or earnings before interest, tax, depreciation and amortization, to 4.67 billion euros (US$5.8 billion) came almost entirely from acquisitions such as that of Spanish mobile operator Amena.
On a comparable basis, stripping out acquisitions, selloffs and currency effects, core earnings rose just 0.1%, France Telecom said. Overall revenue rose 2.2% on a comparable basis, the report said.
"The results from the first quarter are in line with full-year objectives," France Telecom said in an e-mailed statement, reiterating that it intended to generate at least 7 billion euros (US$8.7 billion) in free cash flow this year.
Chief Executive Didier Lombard, 64, who took the helm in February 2005, was trying to reverse a year of negative developments for the former monopoly, whose shares had fallen 19 % over the past 12 months, the report said.