PARIS -- The Board of Directors of Alcatel (Paris: CGEP.PA and NYSE: ALA) reviewed and approved third quarter 2002 results. Third quarter sales decreased sequentially by 17.2% to Euro 3,508 million and by 19.0% on a comparable basis (excluding the impact of Alcatel Shanghai Bell). Loss from operations was registered at Euro 227 million, and Net Loss at Euro 1,352 million or diluted Euro (1.14) per A share ($ (1.13) per ADS). Third quarter sales decreased by 37.5% over the same quarter last year.Serge Tchuruk, Chairman and CEO:"In this particularly difficult market environment, we are well on our way to establishing a foundation which will allow Alcatel to come out of this crisis financially healthy and strongly competitive. During the third quarter our cash position continued to improve: cash flow, before the securitization buy back, was strong for the fifth consecutive quarter and cash on hand increased to Euro 5.1 billion leading to a decrease in net debt to Euro 1.0 billion. In addition, we are achieving our objectives in reducing our cost structure: on a comparable basis fixed costs have decreased by 10% over Q2 and by 26% over the end of last year. While we did see a drop in sales slightly higher than we anticipated during the quarter, operating profit in the majority of our businesses resisted well and we registered a 2 point sequential increase in our gross margin. Nevertheless, with the situation of some of our customers having deteriorated further, we booked a higher level of exceptional write-offs and provisions than originally forecast, which impacted net income by approximately Euro 1.1 billion."Third quarter revenue of Euro 1,720 million was down sequentially 12.6% from Euro 1,969 million, due to decreases across the segment. Broadband networking revenues were down due primarily to the U.S. DSL market and not entirely offset by the pickup toward the end of the quarter in Europe and China. GSM infrastructure performed well thanks to continuing commercial successes, particularly outside Western Europe. Applications software and voice switching declined slightly. Revenues for network design, build and operational services were also down slightly due to market conditions.Income from operations amounted to Euro 30 million, a slight increase over Q2. Profitability was maintained despite the decrease in sales as fixed cost reductions are having a significant impact. Mobile networking continued to have a good level of profitability, while broadband networking resisted well despite an adverse market environment. Advances were also recorded in network management, services and software applications. In a separate release:Alcatel Optronics (Paris: CGO and NASDAQ: ALAO) today reported third quarter results with sequential sales down by 48.8% to Euro 13.0 million. Loss from operations was registered at Euro (45.4) million. Net loss amounted to Euro (78.6) million. Sales decreased by 86.3% over the same period last year.Alcatel SAAlcatel Optronics