Orange SA, the French telecommunications giant, today reported a 2.4% drop in earnings from a year earlier on increased competition from a 3-year price war in France.

The company (NYSE: ORAN) also forecast that in 2015 there might also be a slight decline. Orange seems to be losing the battle against the competition, and has had to sell assets, including in Switzerland and the Dominican Republic.    

While the firm has reaffirmed the dividend for 2015, it’s slightly disturbing when a company feels it has to do this, as it might be a prelude to a dividend cut. The “reaffirming announcement” has been famous last words at other companies when under fire.  

 Orange is one of our original holdings from the Global Income Edge launch  in August last year, and it’s  performed extremely well since then, up 24.3%.

 While other telecoms are performing admirably in Europe, we believe the French market is too unpredictable. Investors should pocket the return.

 ORANGE is a SELL.  

–Richard Stavros, Chief Investment Strategist