Isn't it the French who are supposed to be rude to others?

On Wednesday, accepted wisdom was turned on its head, as international investors gave the cold shoulder to France Telecom (NYSE:FTE) and its fiscal 2005 earnings warning. The company, which became a pick of MotleyFool Income Investor last September, is France's No. 1 telecom provider, holding a 70% share of the overall telecom market and handling 60% of long distance calls. But is that enough?

Consider the investment thesis laid out by Income Investor lead analyst Mathew Emmert back in September. As I read his review, the argument in France Telecom's favor stood on two main legs:

First, the company offered a strong yield of 4% on its 1 euro-per annum dividend. Assuming that dividend remains intact, that investment "leg" should be even stronger for new investors today. For after the 9% drop in the stock price Wednesday, the company's American Depositary Receipts are trading at just $24 each -- 23% lower than they were four months ago. So far, so good.

It's the second leg that's bum. Based on France Telecom's own (apparently overoptimistic) guidance, Mathew noted that the company had "excellent domestic and international growth opportunities." The problem being that opportunities are indistinguishable from pipe dreams until they have been grasped. And judging from Wednesday's earnings warning, France Telecom isn't so good at the grasping business.

The company, which had projected 3% to 5% "pro forma" sales growth for the year, is now set to report just 2% to 3% when it releases its official numbers in February. The same growth it posted last year. The same growth it projects for next year. And not the kind of growth I suspect Mathew was envisioning when he used the word excellent.

You know who just might post excellent revenue growth next year? Not Income Investor pick France Telecom, but Motley Fool Stock Advisor recommendation eBay (NASDAQ:EBAY). In an interesting twist to the France Telecom story, an Associated Press report on the earnings warning mentioned that one of the company's primary problems was that it's losing high-margin customers to voice over Internet protocol provider Skype -- which eBay just acquired.

Say it with me now, all together: "Tres interessant . "

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Fool contributor Rich Smith does not own any of the companies mentioned in this article.