KPN cuts earnings forecast

Dutch telco KPN predicts lower income for 2012, as it embarks on a transformation of its domestic business following a 63% fall in profit in 4Q11.
Chief executive Eelco Blok says the group’s cash flow will also be affected as it takes steps to bottom out its broadband market share in the Netherlands, and stabilize its share of the country’s consumer wireless market. The action is prompted by a slump in the firm’s profit to €176 million, and a 2.2% fall in revenue in the final quarter of 2011.
“We have seen positive trends in IPTV and FttH, and our international businesses continued showing strong underlying profitable growth. However, some aspects in the performance of The Netherlands did not meet our expectations,” Blok concedes.
KPN predicts 2012 free cash flow will be in the range of €1.6 billion to €1.8 billion, with EBITDA between €4.7 billion and €4.9 billion.
The announcement prompted the largest fall in the telco’s share price since 2008, Bloomberg reports.