UPDATE: Areva 3Q Revenue +6% On Reactors & Services, Confirms Outlook

French state-controlled nuclear engineering group Areva SA (CEI.FR) Wednesday reported a 6% increase in revenue for the third quarter, bolstered by its reactors and services division's strong performance, leading the company to confirm its 2010 full-year outlook for significant revenue and backlog growth and an operating loss.

Still, Areva said its operating performance overall will improve this year and that it will post a sharply higher net profit for the year, buoyed by the sale earlier of its transmission and distribution business.

In the third quarter, Areva's revenue rose to EUR2.01 billion from EUR1.9 billion a year earlier, with revenue from the reactors and services division up 11% to EUR759 million. That was largely in line with analyst expectations of around EUR2.03 billion. Meantime, the company's revenue from its so-called front-end operations, which include mining, eased 0.6% to EUR807 million. it said that in the front-end division strong sales growth in mining was offset by a seasonal decline in enrichment and fuel sales.

Areva designs and supplies nuclear reactors as well as builds nuclear power plant facilities. It also mine uranium and provides nuclear-related services. It is the world's largest of its kind and competes with providers like Westinghouse, of the U.S., and a growing number of Asian groups. It's EPR reactor is considered one of the world's most advanced, though there have been some difficulties and long delays in installing the reactors at inaugural projects.

The company said its order backlog at Sept. 30 was EUR42.7 billion, an increase of 2.2% from a year earlier.

Areva also said that changes in the value of the U.S. against the euro led to EUR39 million of income in the he third quarter and EUR 82 million in the first nine months of this year. Those favorable currency impacts arose primarily from the translation of dollars into euros, the company said.

Meantime, Areva said it is monitoring closely the negotiations over a broad restructuring of French rival Electricite de France SA's (EDF.FR) contentious U.S. nuclear partnership with Constellation Energy Group Inc. (CEG). Areva was to have provided its EPR reactor for related projects in the U.S., where both it and EDF have had big ambitions. Areva appears concerned about the impact that the EDF-Constellation negotiations may have on the Calvert Cliffs 3 project.

Previously feuding Areva and State-controlled EDF were ordered earlier this year by French President Nicolas Sarkozy to cooperate over a broad array of areas. And Sarkozy annointed EDF, which is one of the world's largest producers and distributors of electricy, to take the lead in France coordinate efforts in nuclear technology, a blow to Areva.

On other issues, Areva said talks continue with EDF over the closure of the Georges Besson nuclear enrichment plant in France. It also said it is working on a plan to return expatriated employees to their jobs in Niger as soon as conditions permit, following the abduction of one Areva employee and his spouse on the night of Sept. 15.

Company Web site: www.areva.com

-By A.H. Mooradian and Geraldine Amiel, Dow Jones Newswires; +33 1 40171740; art.mooradian@dowjones.com, geraldine.amiel@dowjones.com;

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