Telefonica rides high on EU, Lat Am

Telefonica is standing by its full-year forecasts after a 65% surge in profits in the nine months to end-September.
 
The Spain-based telco grew profits 65.6% to €8.8 billion after intensive sales campaigns across all markets boosted subscriber numbers and revenues, prompting the firm to reiterate its financial targets through to 2012, including a dividend forecast of €1.40 per share in 2010.
 
Growth in all of the firm’s markets boosted overall revenues 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 revenues up 11.9%.
 
The importance of Telefonica’s protracted battle for control of Vivo is highlighted by the fact Latin America accounted for 42% of group revenues during the nine-month period, boosting the proportion of overseas sales income 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 Telefonica 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, its stock price fell 1.7% in early-morning trading as its net profit fell short of expectations, FT.com said.

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