Bouygues SA’s share price down, H1 profit down 61%, full-year sales forecast lowered

Bouygues SA, the French construction and telecommunications conglomerate, reported earnings over the first six months of the current fiscal year were down 61% from a year ago, with its telecom business hurt by a price war.

Bouygues operating profit before one-time items and restructuring expenses fell 61% to €134 million (~$177 million) on an annual basis, on revenue of €15.1bn, which added 1%. Now the France-based company projected that its 2014 full-year revenue would decline in the range from 1% to 2%. In comparison, it has previously forecast that its 2014 sales would be “close to the 2013 level”.

“Although our operating performance reflects a more challenging economic and competitive environment in France, I believe that Bouygues has become stronger since the start of the year,” Martin Bouygues, Chairman and CEO, said in the companys statement.

The net profit of the company increased more than two times over the first half of the year and reached €410 million ($541.43 million) after Bouygues SA finalized the sale of its television sports channel Eurosport and a stake in a highway concession company, which helped it neutralise its telecom divisions losses.

In April 2014 the company did not manage to acquire the SFR division of Vivendi SA, which is the second-biggest phone operator in France. The company also negotiated over a possible deal with the market leader Orange and the fourth-biggest operator in the country – Iliad, but the talks came to nothing, which forced the company to reduce expenses and lay off staff.

Bouygues SA lost 0.30% to trade at €28.38 per share by 13:01 GMT, marking a one year change of +12.02%. The company is valued at €9.56 billion. According to the Financial Times, the 14 analysts offering 12 month price targets for Bouygues SA have a median target of €31.00, with a high estimate of €43.20 and a low estimate of €23.00. The median estimate represents a 8.92% increase from the last price of €28.46.