Operators, vendors report largely disappointing results

A round-up of the most important results announcements over the past few days.

OPERATORS

Latin American heavyweight América Móvil reported a 45% year-on-year fall in net profit to 13.3 billion pesos (US$1 billion), despite a 9.3% increase in revenues to 191.7 billion pesos. The decline was partly down to the weakness of local currencies, which also drove up the cost of handset subsidies. América Móvil says that with more customers opting for smartphones it is seeing pressure on its margins.

A round-up of the most important results announcements over the past few days.

OPERATORS

Latin American heavyweight América Móvil reported a 45% year-on-year fall in net profit to 13.3 billion pesos (US$1 billion), despite a 9.3% increase in revenues to 191.7 billion pesos. The decline was partly down to the weakness of local currencies, which also drove up the cost of handset subsidies. América Móvil says that with more customers opting for smartphones it is seeing pressure on its margins.

Clearwire, the US mobile broadband operator, has reported a second-quarter loss of $145.8 million, compared with a loss of $168.7 million a year earlier. Revenues over the same period fell by 1.8% to $316.9 million, due largely to an 11% drop in wholesale revenues. The company is reported to be considering a sale of spectrum in order to boost its cash position.

Belgian incumbent telecoms operator Belgacom saw a 19% year-on-year drop in second-quarter profit to €161 million ($197 million), while revenues remained flat at approximately €1.61 billion. Belgacom blamed a one-off accounting adjustment of €34 million, relating to new mobile legislation, for the bottom-line setback. It insists it remains on course to hit full-year targets.

NTT DoCoMo, Japan’s largest integrated telecoms operator, saw profits for the quarter ending in June rise by 3.5%, year on year, to 164.3 billion yen ($2.1 billion), as revenues crept up to 1.07 trillion yen from 1.05 trillion yen. The operator appears to be enjoying the fruits of increased smartphone adoption and growing data usage.

VENDORS

Franco-American Alcatel-Lucent announced plans to cut 5,000 jobs and narrow its focus after reporting a disappointing set of second-quarter results. The equipment maker’s net loss came in at €254 million, compared with a profit of €43 million a year earlier, while revenues fell from €3.82 billion to €3.55 billion. Vendors are struggling in the difficult economic climate as operators delay network upgrades and switch to newer technologies that are less profitable for suppliers.

Huawei, China’s biggest maker of telecoms equipment, blamed a 22% year-on-year slide in operating profit on the sluggish economy, as customers continue to reduce their investments. Huawei reported a disappointing first-half profit of 8.79 billion yuan ($1.38 billion), although revenues were up 5.1% to 102.7 billion yuan. The company has made its name as a low-cost provider of networking equipment but more recently has been diversifying into the handset market in response to the challenging conditions.

Juniper Networks, which specializes in the manufacture of internet switches and routers, reported a 50% year-on-year drop in second-quarter net income to $57.7 million. The company said that Asian and European customers had slashed their spending over the past year. Its second-quarter revenues fell by 4.2%, compared with the same period last year, to $1.07 billion.