Date:14/11/11
Telecom Italia SpA, Italy's largest telecommunications company, Friday said its net profit rose 33% in the third quarter, helped by robust growth in Latin America and as revenue fell less sharply at home.
Net profit was EUR807 million, up from EUR608 million in the third quarter of 2010, beating analysts' forecasts of EUR706 million. Revenue rose 12% to EUR7.52 billion, slightly above analysts' estimates for EUR7.48 billion.
Like many of its European peers, Telecom Italia has responded to increasing competition at home by boosting investment in high-growth markets.
Revenue in Brazil rose 15% to EUR1.87 billion from a previous EUR1.62 billion, while earnings before interest, taxes, depreciation and amortization rose 8.3% to EUR496 million. In Argentina, revenue rose 10% to €813 million, and Ebitda was up 6.8% to EUR253 million.
At home, though, Telecom Italia faces pressure from downbeat consumer sentiment in a stagnating Italian economy.
In order to improve its product offering in Italy, where revenue is falling, the operator said it will take a joint holding in Milan's fiber optic network company Metroweb. The move gives it a foothold in the fiber optic business for the first time and enables it to compete better with Swiss-owned broadband operator Fastweb, which also operates in Milan.
Italian revenue in the third quarter fell 4% to EUR4.74 billion, but that was better than the 6% decline in the second quarter and 7.4% fall in the first quarter.
"The improved domestic trends, coupled with effective operational and financial management, allows us to confirm our targets," said Chief Executive Franco Bernabe in a statement. The company kept its guidance for 2011 revenue and Ebitda to be stable compared with 2010.
Telecom Italia is exposed to turmoil in credit markets due to its high debt load. At the end of September, net debt stood at EUR29.95 billion, down from EUR31.47 billion at the end of December.
As part of a strategic plan announced in February, the Italian operator aims to cut its adjusted net debt to about EUR29.5 billion at the end of 2011 and to EUR25 billion in 2013.
Telecom Italia said Friday it expects net debt of around EUR30.7 billion at the end of 2011, because it will pay about EUR1.2 billion for next-generation mobile frequencies in Italy.
Telecom Italia reported better-than-expected results, said Societe Generale."The beat is not the result of managing (down) expectations ahead of figures...but a genuine beat driven by improving trends," it said in a note to investors. As a result of beating forecasts, Telecom's shares were up 4.9% at EUR0.89 at 1245GMT.
Telecom Italia profits rise on strong Latin American growth
Telecom Italia SpA, Italy's largest telecommunications company, Friday said its net profit rose 33% in the third quarter, helped by robust growth in Latin America and as revenue fell less sharply at home. Net profit was EUR807 million, up from EUR608 million in the third quarter of 2010, beating analysts' forecasts of EUR706 million. Revenue rose 12% to EUR7.52 billion, slightly above analysts' estimates for EUR7.48 billion.
Like many of its European peers, Telecom Italia has responded to increasing competition at home by boosting investment in high-growth markets.
Revenue in Brazil rose 15% to EUR1.87 billion from a previous EUR1.62 billion, while earnings before interest, taxes, depreciation and amortization rose 8.3% to EUR496 million. In Argentina, revenue rose 10% to €813 million, and Ebitda was up 6.8% to EUR253 million.
At home, though, Telecom Italia faces pressure from downbeat consumer sentiment in a stagnating Italian economy.
In order to improve its product offering in Italy, where revenue is falling, the operator said it will take a joint holding in Milan's fiber optic network company Metroweb. The move gives it a foothold in the fiber optic business for the first time and enables it to compete better with Swiss-owned broadband operator Fastweb, which also operates in Milan.
Italian revenue in the third quarter fell 4% to EUR4.74 billion, but that was better than the 6% decline in the second quarter and 7.4% fall in the first quarter.
"The improved domestic trends, coupled with effective operational and financial management, allows us to confirm our targets," said Chief Executive Franco Bernabe in a statement. The company kept its guidance for 2011 revenue and Ebitda to be stable compared with 2010.
Telecom Italia is exposed to turmoil in credit markets due to its high debt load. At the end of September, net debt stood at EUR29.95 billion, down from EUR31.47 billion at the end of December.
As part of a strategic plan announced in February, the Italian operator aims to cut its adjusted net debt to about EUR29.5 billion at the end of 2011 and to EUR25 billion in 2013.
Telecom Italia said Friday it expects net debt of around EUR30.7 billion at the end of 2011, because it will pay about EUR1.2 billion for next-generation mobile frequencies in Italy.
Telecom Italia reported better-than-expected results, said Societe Generale."The beat is not the result of managing (down) expectations ahead of figures...but a genuine beat driven by improving trends," it said in a note to investors. As a result of beating forecasts, Telecom's shares were up 4.9% at EUR0.89 at 1245GMT.
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