Telefonica nine-month net profit falls 69%

Reuters

Spanish telecom giant Telefonica (Madrid, Spain) stuck to ambitious shareholder return targets on Friday even while nine-month profit fell a more-than-expected 69% in what the group described as a "challenging" operating environment.

The euro zone's biggest telecom in terms of market capitalization announced a 69% fall in net profit to $3.71 billion on a 5.4% rise in revenues to $63.7 billion in the January to September period, with net profit around $410 million below average expectations.

Telefonica still reiterated earnings targets for this year and confirmed its shareholder remuneration policy, widely questioned in the investment community. Analysts say that given roughly $75 billion in group net debt, ongoing investment commitments and an adverse environment for asset sales, the targets are not reachable.

Telefonica has promised a dividend of $2.4 per share in 2012 and has set a minimum shareholder remuneration target of $2.4 per share from then on.

"It's shocking they haven't lowered their guidance," said a London-based analyst who requested anonymity.

Profit was dented by a $3.6 billion charge to cut up to 6,500 workers at its Spanish unit as competing phone companies make deep inroads into its Spanish customer base.

In a statement, Telefonica blamed a tough regulatory environment and challenging business conditions amid sluggish economic growth, but said it was confident that a new business structure announced in September would soon produce efficiency improvements.

 (Reporting By Elisabeth O'Leary; Editing by Judy MacInnes)

Related Articles

Telefonica O2, Deutsche Telekom, Vodafone plan mobile payments company

Alcatel-Lucent, Telefonica announce 4G mobile broadband program in Spain

Telefonica, Masternaut sign agreement to market fleet management services

ArticleTools

Featured Reports

Content Delivery Networks (CDN) 2015
Content Delivery Networks (CDN) represent large distributed system of servers deployed in multiple data centers across the Internet. CDNs provide solutions for efficiently and effectively managing content of all types. Solutions include core services such as aggregation, management, and distribution of content as well as a variety of value-added functionality.

 

Cable Carrier Wi-Fi: MSO Take MNO Market Share
How does a cable provider gain a bigger piece of the telecom market pie chart? With a clever Wi-Fi strategy, cable providers are in a unique position to dominate the residential and business telecommunications markets. This is the portent of things to come in the very near future: an MSO as MNO play.

 

Structured and Unstructured (Big) Data in Telecom Analytics
This report provides the reader with a broad understanding of telecom data (structured and unstructured/big data) and related analytics. The report identifies market drivers and opportunities as well as forecasts for certain key growth areas such as deep packet inspection.

 

Affordable Market Reports on Big Data, IoT, CDN & More!
Access the exclusive new series of market research reports brought to you through the partnership of Mind Commerce research and TelecomEngine.com.
Browse the latest titles

 

 

Featured Events & Partners

The Telecom Exchange (TEX)
Wednesday, June 24, 2015

Cipriani Wall Street, New York City

Designed to navigate enterprise and carrier network operators through all carrier hotels and colocation houses available in the US and globally.

Visit event website...