Thursday, Thomson SA (TMS) reported a decline in fiscal-2008 third-quarter revenue due to unfavorable currency translation effect, which hurt quarterly revenues by 72 million euros. Revenue at constant currency fell 7.9% year-over-year. The company also announced that it implemented changes to the executive committee.
In the third quarter, the company's revenue decreased to 1.17 million euros from 1.35 million euros in the year-ago period. At constant currency, revenue was 1.24 million euros.
Technology division generated revenues of 105 million euros, compared to 97 million euros last year.
In the latest quarter, revenue from the services division dropped to 522 million euros from 598 million euros in the previous year. At constant currency, the revenue was down 4.9% to 569 million euros.
Revenue from the systems division fell to 541 million euros from 650 million euros in the prior year. Meanwhile, on a constant currency basis, revenue decreased 13% to 566 million. Revenues of both broadcast & networks and access products businesses declined.
Corporate and other division generated revenues of 2 million euros on a reported and constant currency basis, lesser than 3 million euros in the previous year.
Frederic Rose, chief executive officer of Thomson, commented, "We have not been optimising our assets to generate profits and cash. Addressing this is my absolute priority. Our businesses must pursue revenues that are profitable, not revenues for their own sake, and our cost base will be tailored accordingly. Unprofitable business lines will be restructured or exited. Capital allocation will be strictly limited to those areas, which can generate accretive returns. We must deliver improved profitability in 2009.
Our businesses, individually and collectively, will increase in value through this process, leaving us well placed to make the appropriate strategic choices as they arise."
In addition, Thomson said it implemented changes to the executive committee. Didier Trutt, formerly chief operation officer, or COO, took over as head of the systems division. Vince Pizzica joined Thomson from Telstra and he will be responsible for strategy, technology and marketing. On October 1, Andrew Levido joined Thomson from Alcatel-Lucent to take charge of business operations.
Looking ahead, Thomson said it has continued to reduce its costs and confirmed that it is on track to achieve its announced target of a year-on-year reduction in operating expenses of EUR 50 million at constant currency. The company noted that further action is currently being taken to expand cost reduction programs across the company.
TMS closed Wednesday's regular trade at 1.95, down $0.19, on a volume of 218 thousand shares.
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