PARIS -- Alcatel (Paris: CGEP.PA and NYSE: ALA) today reported first quarter 2001 results. Group sales for the quarter were EURO 7,402 million, up 21% over the corresponding period a year earlier, while income from operations grew by 4% to EURO 118 million. Telecom sales increased by 24% compared to the first quarter of 2000, to EURO 6,207 million. Telecom income from operations amounted to EURO 84 million, up 6% from EURO 79 million one year ago. Quarterly net income was EURO 210 million for a diluted EPS of EURO 0.18 per A share ($0.16 per ADS) compared with first quarter 2000 net income of EURO 258 million, or EURO 0.26 per share ($0.23 per ADS).

Serge Tchuruk, CEO, commented, "Alcatel is delivering results. In the midst of current market uncertainties we grew our overall telecom business well above the market rate. We are particularly pleased with our performances in our carrier networking and optics businesses where our first quarter sales to service providers grew well over 40% year-on-year. This confirms our strong momentum in access, packet switching and optical networking where Alcatel's positions on world markets are growing fast and boosting profitability. Partly offsetting our strong advances in the carrier space were significant losses incurred in our e-Business segment. These were largely due to the mobile handset industry slowdown in Europe, compounding the general weakness in the enterprise market."

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