May 17, 2017 / 8:57 AM / 3 months ago

UPDATE 1-Conglomerate Bouygues keeps goals as telecoms arm improves in Q1

* Smaller-than-expected Q1 group loss

* Sees Macron election as being generally positive

* Would consider playing role in changes in telecoms sector (Adds deputy CEO comments from call, shares)

By Dominique Vidalon

PARIS, May 17 (Reuters) - A stronger performance in telecoms enabled French conglomerate Bouygues to post a smaller-than-expected first quarter group operating loss, and the company vowed to increase its earnings further over the full year.

Deputy Chief Executive Philippe Marien also told reporters on a conference call that Bouygues expected the election of French president Emmanuel Macron to be positive for the company.

"Macron's goal is to improve the French economy overall. It's rather good news for all of our businesses," said Marien.

The family-controlled Bouygues group, which also builds roads and owns France's biggest private TV broadcaster TF1 , said first-quarter revenue rose 5 percent to 6.85 billion euros ($7.60 billion), while its current operating loss narrowed to 67 million euros from a 140 million loss last year.

According to a company compiled poll of 15 analysts, median forecasts for Bouygues had predicted quarterly sales of 6.63 billion euros and a current operating loss of 114 million.

Bouygues reiterated the group should improve profits in 2017, driven by all businesses, with Bouygues shares edging higher in early session trading.

France's telecoms sector, hit by a price war following the 2012 arrival of low-cost player Iliad, has been subject to bid speculation in recent years, and Bouygues failed to merge Bouygues Telecom with market leader Orange in 2016.

Bouygues Telecom has nevertheless said it can prosper on its own, and has responded with a restructuring plan including job cuts and a focus on its 4G network and fixed-line broadband.

Asked about future consolidation in the telecom sector, Marien reiterated Bouygues' earlier position.

"If in the coming months or years the situation changes and we have the opportunity to play a major role to strengthen in telecoms, we would look at it," he said.

Bouygues Telecom's quarterly revenues rose 8 percent to 1.22 billion euros and it posted a current operating profit of 41 million euros, versus a 31 million loss last year.

Bouygues Telecom also confirmed targets for a 25 percent EBITDA margin in 2017 and 300 million euros of free cash flow in three years time.

Bouygues' results also benefited from a recovery in the French construction market, with the company having won 1 billion euros of contracts under the 'Grand Paris' infrastructure expansion plan for the French capital.

Bouygues shares are up 14 percent so far in 2017, outperforming an 11 percent gain on France's benchmark CAC-40 index.

$1 = 0.9015 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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