Wanadoo, the internet arm of France Telecom, has reported healthy sales and confirmed it is on track to meet subscriber targets.

Revenue hit 407m euros (�254m) over the July to September quarter, one third higher than a year before, Wanadoo, Europe's number three internet service provider (ISP), said.

And Wanadoo's subscriber numbers had surged to 5.35 million by the end of last month, compared with 2.05 million in September 2000, the firm said.

This performance leaves Wanadoo on track to hit a target of 3 million subscribers in France by the end of the year, chairman Nicolas Dufourcq said.

Investor caution

But the figures proved insufficient to lift investor sentiment surrounding European dot.coms.

"These figures are bang in line with our expectations but I don't think they're impressive enough to impact poor market sentiment on the ISP sector at the moment," BNP Paribas analyst Alex Lord said.

While Wanadoo's e-tail performance was better than expected, its portal revenues of 73m euros were "disappointing", Mr Lord added.

Wanadoo shares fell 4.57% to 4.39 euros in early trade on Thursday.

Freeserve growth

The growth in Wanadoo's subscriber numbers was boosted through acquisitions, including the takeover of UK internet service provider Freeserve last year.

Freeserve saw a "healthy upswing" in customers to its unmetered access internet service with a total of 596,000 at the end of September.

Wanadoo's broadband internet services gained 93,000 new customers between July and September.

For advertising revenue, market conditions "remained difficult", Wanadoo said, reporting takings down 18% in the firm's key French market.

But Mr Dufourcq said: "In terms of our sales, I think we can say that we are keeping pace with our market projections and that there will be no surprises."