France Telecom SA, the country’s biggest phone company, posted better-than-expected full-year profit, aided by strong demand for Apple Inc.’s iPhone.

Adjusted net income fell to 4.85 billion euros ($6.53 billion) from 5.18 billion euros a year earlier, the Paris-based company said in an e-mailed statement today. Analysts had predicted profit of 4.6 billion euros, the average of 31 estimates compiled by Bloomberg. Revenue declined to 45.94 billion euros from 47.7 billion euros.

France’s largest phone company is looking to make peace with unions angered by a series of employee suicides and drive growth in emerging markets such as Africa. New Chief Executive Officer Stephane Richard, whose appointment has been welcomed by labor groups, takes over on March 1.

“The group’s performance in 2009 confirms the strategy undertaken in 2005 to position the group as an integrated operator,” Chairman Didier Lombard said in the statement.

This month, BT Group Plc, the U.K.’s biggest fixed-line operator, said earnings rose 11 percent in the fourth quarter before interest, taxes, depreciation, amortization and costs to cut jobs. On Feb. 4, Vodafone Group Plc, the world’s largest mobile-phone company, raised its full-year cash flow forecast, on cost cuts and rising sales in emerging markets.

France Telecom said it is proposing an annual dividend of 1.4 euros per share.

source:bloomberg