Sales in the April-June period totaled 345.7 million euros (389.7 million dollars), down from 418.7 million 12 months ago, the company said.

Over the first half of the year, it said sales amounted to 642.4 million euros "in line with its objectives" and "confirms its forecast of a positive operating result."

It had posted sales of 780 millions euros for the first half of 2002.

Bull had negative shareholders' funds of 760 million euros at the end of last year, but is kept afloat with huge debt and state support.

In June the EU Commission challenged Bull over the non-repayment of a rescue loan from the French state of 450 million euros which should been settled by June 17.

On Wednesday the company said: "Following up a positive operating result in the 2002 second half, the achievement of our objectives in the 2003 first half was an essential prerequisite for the restructuring of the group's capital, the third stage of its recovery plan."

Bull, which has received billions of euros aid from its French state stakeholder over decades, did not provide information on its finances.

The last state rescue, in March 2002, accompanied the group's recovery and restructuring plan that included layoffs. That aid is under investigation by the European Commission to see if it breaches European Union rules.

At a shareholders meeting in late June, chief executive Pierre Bonnelli said he hoped to complete the company's financial restructuring by September, but warned that no matter what the outcome, investors would have to bear "significant sacrifices".

Any solution will include the planned departure of the state from the company, he reaffirmed.

Bonnelli is currently pursuing 11th-hour negotiations trying to recapitalize the group and attract new partners. He has refused to identify the names of the interested parties, but Bull has indicated they include a US group and a European group.

Bull's main stakeholders are France Telecom, Japanese company NEC and US company Motorola with 16.9 percent each, the French state with 16.3 percent, and Dai Nippon Printing with 5.3 percent.

The company has said repeatedly that it would declare bankruptcy if no solution were found.

Bull shares -- now "penny stock" -- took a beating in the 2001-2002 high-tech meltdown, but have climbed 21.05 percent since January 1.

On Wednesday it was 1.47 percent higher at 0.69 euros in afternoon trading in Paris, while the CAC-40 index was up 0.71 percent.

SPACE.WIRE