Bouygues Third-Quarter Earnings Beat Estimates on Cost Cuts

Bouygues SA (EN), the French building and telecommunications company, said third-quarter profit rose 13 percent, beating analysts’ estimates, helped by cost cuts at its mobile-phone and broadcasting divisions.

Current operating profit increased to 542 million euros ($713 million) from 478 million euros a year earlier, the Paris-based company said in a statement today. Analysts surveyed by Bloomberg had forecast 465 million euros, according to the average of four estimates. Net income rose 26 percent to 360 million euros.

Bouygues, which controls France’s third-largest mobile-phone operator and TF1, the country’s biggest television network, has cut jobs and prices to respond to Iliad SA (ILD), which started a discount mobile service in January 2012. Bouygues Telecom also started talks in July with SFR, France’s second-largest phone operator, to share part of their mobile networks.

“The construction businesses demonstrated a good commercial performance, while TF1 and Bouygues Telecom strengthened their offerings in a highly competitive environment,” the company said in the statement. “The adaptation plans delivered the expected results and the group’s profitability continued to improve.”

Last year “should mark the low point” in profitability, the company reiterated today, adding that margins should continue to improve in the fourth quarter. It repeated a goal to stabilize Bouygues Telecom’s earnings before interest, taxes, depreciation and amortization at about 900 million euros in 2013.

Total sales were unchanged in the third quarter as falling revenue at Bouygues Telecom and Television Francaise 1 offset rising construction and real estate billings. The company also reiterated today that full-year sales may fall as much as 1 percent or be stable.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net

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