UPDATE: Portugal Tel 4Q Net Profit Down 83% On Lower Revenue
February 24 2011 - 8:30AM
Dow Jones News
Portugal Telecom SGPS SA (PT) Thursday said fourth-quarter net
profit dropped 83% due to restructuring costs and a decline in
domestic wireline and mobile revenue.
Portugal's biggest telecommunications company by market value
said net profit fell to EUR54.5 million in the fourth-quarter from
EUR312.1 million a year earlier. PT's fourth-quarter earnings were
the first to not include a contribution from Brazilian mobile
telephone company Vivo Participacoes SA (VIV) after the company
sold its stake in Vivo to Telefonica SA (TEF) in September for
EUR7.5 billion.
PT restated its earnings for the rest of 2010 and for 2009 to
remove Vivo's operating results. The company's 2010 net profit,
however, was buoyed by a first installment of the payment from
Telefonica of EUR5.5 billion. PT's 2010 net profit rose to EUR5.67
billion from EUR684.7 million in 2009.
PT's fourth-quarter wireline revenue dropped 5% to EUR476.3
million, while mobile revenue fell around 11% to EUR342.1 million.
Total fourth-quarter revenue dropped to EUR949.7 million from
EUR961.3 billion in the same period a year earlier.
European telecommunication companies are increasingly reliant on
high growth markets to fuel growth as competition and regulation
weigh on mature markets at home. While data revenue is soaring due
the surge in smartphones and the growth of broadband, fixed-line
voice revenue is under pressure, while some customers are also
cutting spending due to the financial crisis and government
austerity measures, which include tax hikes.
"The quarterly results show PT's revenue in its domestic
business is still pressured by the macroeconomic context and
competition dynamics," said Millennium BCP analyst Alexandra
Delgado. However, both mobile and wireline margins were very
positive, she added.
In the fourth quarter, PT was also hit by EUR134.7 million in
restructuring costs, mainly related to workforce reductions and
other cost efficiency efforts.
Fourth-quarter earnings before interest, taxes, depreciation and
amortization decreased to EUR362.5 million from EUR379.9
million.
At 1254 GMT, PT's shares traded up 1.2% at EUR8.33.
Company Web site: http://www.portugaltelecom.pt
-Contributed by Carla Canivete of Webtexto to Dow Jones
Newswires; +34-91-395 8120; djmadrid@dowjones.com
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