TEF Telefonica SA

By Jeannette Neumann

MADRID--Spanish telecommunications giant Telefonica SA (TEF) swung to a profit in the fourth quarter after booking major restructuring costs a year earlier.

The Madrid-based company Thursday said fourth-quarter net profit was 145 million euros ($153 million) versus a EUR2.2 billion loss a year earlier, when the company booked provisions to cover voluntary buyouts for its employees in Spain.

Revenue in the fourth quarter was EUR13.7 billion, a 1% decrease from the year earlier period. Analysts had estimated sales of EUR13.6 billion in the quarter, according to data provider FactSet.

Operating income excluding depreciation and amortization was EUR3.2 billion in the quarter versus EUR721 million a year earlier. Analysts had estimated OIBDA of EUR3.1 billion in the quarter, according to FactSet.

Telefonica Executive Chairman Jose Maria Alvarez-Pallete said in a statement that the company expects 2017 will see "similar operating trends: revenue stability despite higher regulatory impacts, mainly in European markets, OIBDA margin expansion and lower CapEx intensity."

Telefonica's net debt decreased by EUR998 million to EUR48.6 billion in the fourth quarter compared to the third quarter.

As part of its reduction drive, Telefónica on Tuesday announced that it had agreed to sell up to 40% of its Telxius infrastructure unit to KKR & Co. for EUR1.28 billion, or EUR12.75 a share.

The unit owns and operates around 16,000 telecommunications towers in five countries and around 31,000 kilometers (19,263 miles) of submarine fiber optic cables. Telefonica had tried to float Telxius last year but failed because of weak investor demand.

Write to Jeannette Neumann at jeannette.neumann@wsj.com

(END) Dow Jones Newswires

February 23, 2017 02:50 ET (07:50 GMT)

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