Telefónica boosts profit 9%

Michael Carroll
12 Nov 2010
Daily News

Telefónica is standing by its full-year forecasts after a 65% surge in profits in the nine months to end-September.

The Spanish-based global telco grew earnings 65.6% to €8.8 billion ($12.0b) after intensive sales campaigns across all markets boosted sub numbers and revenues. It confirmed its financial targets through to 2012.

Growth in all of the firm’s markets boosted overall revenue to €44 billion between January and September, with income in Latin America up 10.7% year-on-year following the acquisition of Vivo in Brazil, while the UK and Germany led the way in Europe with sales up 11.9%.

The importance of Telefónica’s protracted battle for control of Vivo is highlighted by the fact Latin America accounted for 42% of sales during the nine-month period, boosting the proportion of overseas sales to 67% of total group revenues.

Strong sales of smartphones and dongles boosted the group’s mobile broadband subscriber base 73.4% to 19 million by end-September, while fixed broadband customers grew 1.1 million to 16.7 million, driven mostly by additions in Latin America, Germany and Spain.

Matthew Key, head of Telefónica Europe, said “unprecedented demand for mobile data,” helped boost the division’s revenues 11.8% to €11.2 billion year-on-year, and claimed O2 UK is now the country’s leading service brand.

Despite the firm’s bullishness, Telefónica’s profit fell short of analysts’ expectations. Its NYSE stock fell $1.92 to $73.74 on Thursday.

MORE ARTICLES ON: Earnings, Europe, Latin America, Smartphones, Telefonica

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