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Feb. 17, 2015, 2:38 a.m. EST

Orange warns sales will continue to slide

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By Ruth Bender

PARIS-- Orange SA on Tuesday said it expects earnings and sales to continue to fall this year even though sales in the telecom company's intensely competitive domestic market fell less sharply than expected in the last quarter.

Orange said sales fell 1.6% to EUR10.05 billion ($11.41 billion) in the fourth quarter, topping analysts' expectations, as sales in the mobile segment in France--its largest market--continued to improve. Fourth-quarter earnings before interest, taxes, depreciation and amortization fell to EUR2.81 billion, excluding exceptional items, such as charges linked to a retirement plan, from EUR2.87 billion in the same quarter last year,

Similar to its rivals Orange has been hurting from a tough price war since low-cost operator Iliad SA entered the mobile market with cut-throat tariffs three years ago. But the situation has improved in more recent quarters as prices have stabilized.

"We are moving on a slope that is clearly better than before," finance chief Ramon Fernandez said on a conference call. Mr. Fernandez said the company was approaching its target of stabilizing revenues "sometime between 20015 and 2016."

For the full year, Orange posted a 51% drop in net profit to EUR925 million, weighed down by exceptional items such as charges linked to the group's part-time pension plan, litigation settlements and a reorganization of its real-estate assets. Full-year Ebitda fell to EUR12.19 billion, in line with the group's target, on lower revenue of EUR39.45 billion.

Orange said its Ebitda margin remained stable at 30.9% as the group cut costs throughout the year to stem declining revenue.

Write to Ruth Bender at Ruth.Bender@wsj.com

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