Major telecom carriers report first quarter results

Major network operators in the telecom industry have reported quarterly earnings during the months of April and May. Telecom earnings varied in the first quarter of 2011, but the majority had a slight increase in revenue compared to the same quarter in 2010. Of the carriers mentioned in this summary, Verizon Communications saw an increase in its earnings in a large part due to its adoption of the iPhone.

Verizon

Major network operators in the telecom industry have reported quarterly earnings during the months of April and May. Telecom earnings varied in the first quarter of 2011, but the majority had a slight increase in revenue compared to the same quarter in 2010. Of the carriers mentioned in this summary, Verizon Communications saw an increase in its earnings in a large part due to its adoption of the iPhone.

Verizon
Verizon Communications (New York, NY) reported strong earning in the first quarter of 2011. Verizon’s consolidated revenues totaled $27 billion, up 0.3% from the year-earlier quarter. First-quarter total operating revenues increased 5.3 percent from the same quarter of 2010.

Verizon sold a reported 2.2 million iPhones in only eight weeks of the first quarter, compared to 3.6 million sold by AT&T. The service provider added 1.78 million wireless subscribers. There was a 29.6 percent increase in total wireless revenue in the first quarter.

Another major factor in the quarterly results was Verizon FiOS, which added 25.7 percent increase in FiOS television customers, and a 23.7 percent increase in FiOS internet customers.

AT&T
AT&T Inc. (Dallas, Texas) reported financial results for the first quarter of 2011 and reports a wireless and wirelined revenue growth. AT&T’s consolidated revenues totaled $31.2 billion, up more than $700 million, or 2.3 percent, versus the year-earlier quarter.

Compared with results for the first quarter of 2010:

  • Operating expenses were $25.4 billion versus $24.6 billion
  • Operating income was $5.8 billion, down from $6.0 billion
  • Operating income margin was 18.6 percent, compared to 19.6 percent.

Total wireless revenues, which include equipment sales, were up 10.2 percent year over year to $15.3 billion. Wireless service revenues increased 8.6 percent, to $14.0 billion, in the first quarter.
Wireline revenue was up 0.5 percent year over year, to $5.3 billion. It’s the third consecutive quarter of year-over-year growth.

Orange
Despite unfavorable conditions in certain markets, Orange (Paris, France) reported first quarter results in line with its financial objective for 2011. Group customers totaled 215.9 million, up 7.0%, versus the year-on-year quarter. Orange’s consolidated revenues increased 0.4% to 11.228 billion euros.

Restated EBITDA (Earnings before Internet, Taxes, Depreciation and Amortization) was 3.734 billion euros in the first quarter of 2011. The EBITDA margin was 33.3%, down 1.3 percentage points versus the first quarter of 2010, notably due to the unfavorable impact of the partial pass-through of the VAT increase starting 1 January 2011.
Other unfavorable impacts for Orange were the conditions in Egypt and Côte d’Ivoire, and intensified competition in France.

Vodafone
Vodafone Group PLC (Porto, Portugal) reported a loss in profit in the first quarter of 2011. The service provider reported a profit of just under 13 billion dollars, down from almost 14 billion dollars in 2010. Group revenue was up 3.2% to $74.15 billion.

Vodafone’s EBITDA was down 0.4% at $23.73 billion. The EBITDA margin was 1.1 percentage points lower at 32.0%, which was reportedly in line with investor expectations.

The company reported strong performance in key revenue growth areas of data, which increased 26.4%, and emerging markets, which increased 11.8%. Vodafone also reported a successful drive to increase smartphone penetration in Europe, which was up from 11.6% to 18.7% year-on-year.

Deutsche Telekom
Deutsche Telekom (Bonn, Germany) first quarter earning fell short of expectations. The network operator reported a loss in revenue during the first quarter. Net earnings for the first quarter were down by 3% year-on-year to $20.8 billion.

Adjusted EBITDA was down by 5% year-on-year to $6.38 billion in the first three months of 2011.

Various sources attribute the losses to difficult competitive environment, regulatory intervention, tax burdens, and seasonal influences on capital expenditure.